INTERNET
Line rental price hike stuns Esat BT
13-01-2004
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Esat BT has said it is 'absolutely staggered' that Eircom has moved to increase its line rental charges by about 8 percent to EUR24.18 from EUR22.50 per month.
Line rental in Ireland has not yet been deregulated and customers of rival telecoms operators to Eircom still have to pay line rental to the former state firm. "Line rental is still not open to competition and Eircom are pushing all of their prices increases through in this sector. This price increase affects everybody's customers, not just Eircom's," said Esat BT's director of communications Una McGirr. She said that this was the third price increase in less than twelve months and estimated that it had added EUR27 million to Eircom's bottom line and claimed that the three price increases together would add EUR100 million.
Esat BT has been quite vocal of late in calling for the prompt introduction of wholesale line rental, which will enable competing firms to offer line rental directly to customers. McGirr on Tuesday speculated that these recent price increases would be used by Eircom to justify a higher price for wholesale line rental than may previously had been expected.
McGirr's comments follow Eircom's announcement that it is to increase line rental charges by about 8 percent to EUR24.18 from EUR22.50 per month, including VAT. Eircom came out fighting in making its announcement, following criticism that its line rental charges are far in excess of EU averages. Despite the increase, the company said that telephone charges for Irish customers continue to fall and total telephone bills for both business and residential customers are below the EU average. The company said that business phone bills were now 31 percent lower than those for businesses in the UK.
Eircom's charges are restricted by a price cap, which means that its total basket of prices cannot increase more than the rate of inflation. The company said that Tuesday's announcement and the EUR11 million reductions in call charges in 2003 meant that telephone prices in the past year have risen in line with inflation and represent an overall increase of 3 percent on the average residential customer bill and 2 percent on the average business bill.
Justifying the latest rise in rental charges, Eircom pointed out that it was the only telecommunications company investing in the provision and maintenance of the local access network in Ireland. "It is essential that the network is adequately funded, so that Eircom can continue to provide broadband and other advanced telecommunications services to customers", the company said.
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