asked the Minister for Communications if the proposed development by Telecom Éireann of (a) telemarketing (b) a data entry service and (c) further activities in the areas of cabling and private networks will benefit from a parent company guarantee in respect of borrowing; if so, his views on whether there is adequate protections for the taxpayer against loss, and adequate protection against unfair competition with private sector firms operating in the same fields; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Telecom Éireann Proposed Development.
1.
As the Deputy is aware, Bord Telecom Éireann were set up under the provisions of the Postal and Telecommunications Services Act, 1983, to provide a national telecommunications service and to satisfy, so far as the company consider reasonably practicable, all reasonable demands for such services throughout the State. The Act requires the company to ensure that their revenues are not less than sufficient to meet all charges properly chargeable to revenue account taking one year with another, to generate a reasonable proportion of capital needs and to remunerate capital and repay borrowings.
Bord Telecom Éireann have been achieving improving financial results and this year the company expect to make their first profit. It is my policy to encourage the company to develop proposals to achieve their objectives, to further improve their financial position, to keep abreast of changing market needs and to provide high quality services subject, of course, to compliance with the legislation governing the activities of the company. I am informed by the company that the question of the provision of a guarantee by itself or by any other body in respect of the proposals referred to by the Deputy has not arisen to date.
On the question of competition with private firms operating in the same fields as Bord Telecom Éireann, the company have not been receiving any preferential treatment in that regard and there are no proposals to alter that position.
Will the Minister state in respect of the items mentioned, if Bord Telecom operate a statutory monopoly in respect of any of these areas? If the board are conducting this work themselves, is it being conducted with the benefit of a parent company guarantee and, if so, does that not give an unfair advantage to the board in competition with the private sector in doing work of this kind in that their endeavours in the area are backed with the guarantee of the borrowing of An Bord Telecom itself which is ultimately backed by the State, whereas the activities of the private sector competitors have to be financed at higher rates of interest because they can only give their own security?
I already said that I am informed by the company that the question of the provision of a guarantee by itself or by any other body in respect of the proposals referred to by the Deputy has not arisen to date. As far as the State monopoly is concerned, until the details of Telecom Éireann's proposals are made available it is not clear that any of the proposed activities are comprehended by Telecom Éireann's statutory monopoly.
Is it the Government's intention that these activities be conducted by a subsidiary company of Telecom Éireann in which case there might be an issue as to whether the guarantee should be given for their borrowing, or are they to be conducted by the company themselves in which case a guarantee is automatically given?
At the moment the company are examining proposals. They have appointed a firm of international consultants to assist in identifying new areas offering potential for appropriate ventures. The question of guarantees will come up when the decision is made.
Will the Minister give an assurance that in a case where An Bord Telecom are competing with the private sector in any of these activities it will be on level terms in respect of their borrowing activities?
We are having repetition now.
Each individual situation will be looked at.