Telecom Eireann has announced a package of price cuts for business and residential users which it claims will knock £55 million off phone bills in a year.
The main change is to merge the two current national long-distance rates into one flat rate.
The new national long-distance rate brings the approximate price per minute down from 15p during the day (8 a.m. to 6 p.m.) to 10p per minute. The evening rate will fall from 10p to 7p between 6 p.m. and 8 a.m. on weekdays. The weekend rate is 1p per minute.
The rate to call mobile phones from a fixed line is being reduced by up to 17 per cent. It brings the daytime rate per minute down from 28p to 23p, and the evening and weekend rates down from 18p to 15p.
Telecom says the move will result in savings of up to one-third on long-distance calls over 56 kilometres. Around one-quarter of Irish telephone call revenue is believed to come from national long-distance calls in this category.
The new rates, which will take effect from October 21st, bring to about £100 million the reductions announced by Telecom this year.
The Eireann company's chief executive, Mr Alfie Kane, indicated that yesterday's announcement was another step along the way to a uniform local rate for the whole State. He said it was also part of a move by the company to simplify its pricing structures.
The mobile-phone operator, Esat Digifone, welcomed the reductions in calls to mobile phones, saying it would encourage more calls. However, Digifone's chief executive, Mr Barry Maloney, said the only reason Telecom was doing this was to stave off an EU investigation into the amount of money the fixed-line operators retained for a call to a mobile phone, which, he said, was far too high. (Ireland is one of the countries about which the EU has expressed concern on this issue).
The Minister for Public Enterprise, Ms O'Rourke, also welcomed the price cuts, saying they would benefit consumers and business. She said the reductions had also underlined the importance of the Government's decision to liberalise the telecommunications market in the State on December 1st, 13 months ahead of schedule.
"I hope Telecom will now turn their attention to address the issue of introducing a flat-rate Internet charge. Such a move would be a major boost to the promotion of Ireland as a centre for commerce."
Telecom said it was looking at the issue of Internet rates at the moment and that it had cut the charges earlier this year.
It is understood that Telecom will announce a further £30 million in price cuts before the end of the year.
Yesterday's cuts followed the introduction in June of a special weekend rate for international calls and the reduction in July by one-third of the cost of accessing the Internet during peak hours.
It also announced reductions in the cost of calls to Britain from 24p to 19p a minute during the day, with the evening rate down to 17p.
Mr Kane said Telecom was investing £350 million in developing intelligent and broadband networks to accelerate the State's readiness for the information age.