TELECOM Eireann customers could pay up to £40 million less in phone charges next year, thanks to a move to cap charges, the Dail was told yesterday. Domestic users will also benefit substantially from the fall in charges, according to Telecom Eireann.
Customers will see their telephone bills fall by 6 per cent per year over the next five years the Minister of State at the Department of Transport, Energy and Communications, Mr Emmet Stagg, told the Dail. Speaking at the Committee Stage of the Telecommunications (Miscellaneous) Bill, he said the charges would fall from next January.
He said the Minister Mr Lowry, would ensure that the capping order will also benefit domestic users. The Minister will also have the power to review the order after two years and after it if it is believed that further reductions should be implemented.
Telecom Eireann will have discretion to reduce the charges from the "basket of services" where it has a monopoly. The reductions could apply to a variety of areas including international and domestic calls and line rental.
A Telecom spokesman said last night that the cap was in line with Telecom's own policy of reducing charges. Next year it will introduce a scheme whereby domestic customers will get a bulk discount- if they call particular numbers several times per week. There are also plans to reduce trunk call rates within Ireland.
"We have already substantially reduced call charges in the last year - by £130 million, which is more than to per cent of our actual turnover - and that trend is going to continue," the spokesman said.
Telecom plans to finance the fall in phone charge revenue through the cost reduction programme which it is implementing. This will see payroll costs reduced by one third and includes a voluntary redundancy programme.
Telecom contends that it was not surprised at the scale of the cap the Minister decided to introduce, but admits it will make things more difficult.
The Telecom Bill is expected to be signed into law next month. It provides for a new post of regulator for the telecommunications industry and includes legislation to enable KPN/Telia to become strategic alliance partners of Telecom.
The consortium is paying £183 million for a 15 per cent stake in Telecom and has an option to buy a further 20 per cent stake for £200 million after three years.