I move that the Bill be now read a Second Time. This is the sixth Telephone Capital Bill since the transfer of services in 1922. Funds for the development of the telephone service, that is, for extension of the system, as distinct from its operation and maintenance, are provided by Telephone Capital Acts. These Acts authorise the Minister for Finance to issue out of the Central Fund from time to time such sums not exceeding a stipulated amount as may be required for development of the telephone service. Funds provided by Telephone Capital Acts represent an investment by the State in the telephone service. The security to the State for the capital investment is represented by the assets of the service, consisting of plant, apparatus, and property generally forming the telephone system. The annual capital charges in the way of interest and depreciation are a charge against the earnings of the service.
The last Telephone Capital Act, 1938, provided a sum of £1,000,000, which is now almost entirely spent. The sum provided was expected to be expended within about five years, but the very difficult supply position which arose owing to the emergency prevented the execution within that time of the development programme contemplated. The development work done has, therefore, been quite inadequate to meet the growing demands on the service, much less to provide for future growth.
During the last six or seven years the service has been carried on under most difficult conditions and only by the exercise of the utmost ingenuity on the part of our engineering staff has it been possible to prolong the life of much plant which had far outlived its normal period of efficiency. As in other countries throughout the world we had to impose certain restrictions on the connection of new subscribers but we have been able to meet all really essential demands for service by public authorities, doctors, etc., as well as a substantial proportion of applications for business lines.
Despite the restrictions on acceptance of new subscribers — which in the last year or two involved refusal of almost all applications for telephones required for personal or social use and for less essential businesses — traffic on the telephone system has continued to grow at a remarkable rate. Trunk calls increased from 3,300,000 in 1938 to 7,118,000 in 1945 and local calls in the same period increased from 30,000,000 to 48,000,000. The figures so far this year show a further advance. These huge increases, occurring at a time when the expansion which could be effected in our exchanges and trunk circuits was limited by the emergency supply conditions, strained the capacity of the system to the limit, and sometimes beyond the limit. Under these conditions the standard of service inevitably has suffered.
The equipment in the principal Dublin automatic exchanges serving mainly the business community has been heavily overtaxed for several years past. The equipment of the Dublin trunk exchange likewise is insufficient to cope satisfactorily with traffic at the busiest periods. Numerous other exchanges throughout the country need to be replaced or extended. Additional circuits are needed on almost every telephone trunk route to enable trunk traffic to be dealt with expeditiously. Underground cables containing subscribers' circuits must be laid extensively before all the existing demands for telephone service to new subscribers can be met.
I have mentioned these conditions as indicating the volume of arrears of construction work which requires to be done in order to cater satisfactorily for present traffic and to meet current demands. This work by itself would be very costly and would take a long time to execute. But in addition to clearing arrears and meeting present demands much more is needed in order to provide for development of the service in the future.
The possibility of expanding the telephone service on a very large scale has been closely examined and I am satisfied that the time is opportune to prepare for such expansion. Plans are being completed and work is proceeding on a scheme having for its object the trebling of the present number of telephones in use. In order to attract new subscribers in the numbers contemplated it will be necessary to make the service as efficient, as attractive and as cheap as possible. At present the hours of service at many exchanges are from 8 a.m. to 8 p.m. on week-days and 9 a.m. to 10.30 a.m. on Sundays and bank holidays. At any more, the hours of service extend only to 10 p.m. with the addition of the hours 7 p.m. to 9 p.m. on Sundays. I fully recognise that the telephone loses much of its attractiveness when the hours of service are restricted; for many people its availability in any domestic emergency is one of its greatest benefits. I am satisfied that the telephone service could not be extensively developed in rural areas and small towns unless continuous service were given. Our plans provide, therefore, for giving continuous service at all but the very smallest exchanges (those with less than about five subscribers). In order to give this service it will be necessary to instal automatic equipment in lieu of the present equipment at the great majority of exchanges. In conjunction with the automatic system it will be necessary to have central manual exchanges (i.e., exchanges staffed by operators) at selected points throughout the country to deal with trunk calls, inquiries, etc.
We aim also at giving virtually a "no delay" service on trunk traffic, that is, all calls, except an occasional one at the busiest traffic period, from any point in the country to any other point will be connected without the caller leaving the telephone.
As I have already announced on a previous occasion it is proposed within the next five years to instal a telephone call office at every post office which is at present without one.
The programme of construction work involved in raising the standard of service on these lines and catering for the increase in subscribers which we expect is an enormous one. It will be very costly and will take many years to complete. New underground cable containing subscribers' circuits will have to be laid in every city and town in the country.
More than 600 new automatic and semi-automatic exchanges and about 50 central manual exchanges must be installed. To house the larger automatic exchanges about 130 new buildings will be needed and accommodation for the manual exchanges will involve either the extensive alteration of existing premises, the acquisition of additional premises, or the erection of new buildings.
To cater for estimated growth of trunk traffic, plans are being made to increase the trunk network six to eightfold. The position has now been reached on some of our main routes that no additional circuits can be erected overhead, and underground trunk cables must be laid to provide the circuits required. Such cables are extremely costly and take a long time to manufacture and lay, but they enable all possible demands for the future to be adequately met. To give a satisfactory service on cross-Channel calls a new submarine cable will be laid. It is also intended to erect telephone kiosks on a very generous scale in cities and towns.
The full programme of development contemplated will cost not less than £10,000,000 in capital expenditure, but this Bill, following previous practice, provides only for the amount — £6,000,000—which is likely to be spent in the next four or five years. The sum of £6,000,000 includes provision for new automatic and trunk exchanges at Dublin, Cork, Limerick, Waterford and 30 other main centres; installation of 100 automatic exchanges in smaller towns and 500 semi-automatic exchanges in rural areas; main underground trunk cables and overhead trunk circuits; subscribers' circuits; and the installation of call offices at post offices. The expenditure under the main headings is estimated to be as follows:— New exchanges and buildings, £2,072,000; trunk circuits, £2,400,000; subscribers' circuits, £1,360,000; kiosks and call offices, £275,000; other works, £245,000; giving a total of £6,352,000, which has been rounded down to £6,000,000.
The annual charges on this capital expenditure will, of course, impose a heavy burden on telephone revenue for many years ahead. But the profit earned in the last few years has been so high (about £250,000 per annum) that a substantial margin is available for development and I am satisfied that while the heavy charges for interest and depreciation which will be incurred may temporarily convert that profit into a loss, any such loss will quickly be overtaken as plant becomes revenue-earning. While generous provision of equipment, lines, etc., will be made, we shall guard against providing plant too far in advance of its being required.
