We will now commence our review of fixed-line charges and billing practices. I welcome Mr. David McRedmond, the commercial director of Eircom. I understand that Mr. McRedmond is joined by Mr. Donal Donovan and Ms Annmarie Kearney. Is that correct?
Fixed-line Charges and Billing Practices: Presentations.
Mr. David McRedmond
I will be making the presentation on my own. The names mentioned by the Chairman are on a list of those accompanying me to the meeting which was submitted to the joint committee.
I thank Mr. McRedmond for appearing before the committee. The last time that we met was 28 January this year, when we had a fairly lengthy engagement. Perhaps he might send the clerk a copy of the presentation in electronic form. Before we begin, I draw attention to the fact that members of this committee have absolute privilege, but the same privilege does not apply to witnesses appearing before the committee. The committee cannot guarantee any level of privilege to witnesses appearing before it. Under the salient rulings of the Chair, members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable. I advise members of the format.
We will hear a presentation, followed by a question-and-answer session. I ask members to adhere to the salient rules of the House. The last engagement was difficult for several of those making the presentation, and I ask them to be conscious of that.
Mr. McRedmond
I circulated a presentation to members of the committee. We will ensure that they have an electronic copy. I will read out the page numbers as we start. On page 2, members will see various headlines and stories, which I understand are the reasons for the committee's concern and for our being invited to present what has happened today. They are to do with billing errors and overcharging by telecoms companies, of which Eircom had an instance this summer, which I will describe.
I will turn to page 3. In summary, I would like to cover the area of prices, as I believe has been requested, billing and, if we get the opportunity — I was advised that the committee would be interested — we can briefly cover some issues to do with broadband. Our prices represent good value and are competitive. In real terms, Eircom's prices have fallen by 47% since 1997. I wish to emphasise that, since it can easily be glossed over by commentators, journalists and politicians. There is an assumption that such low prices can simply be delivered, but it takes a great amount of work and effort from Eircom's 7,500 employees to do it.
It is part of our commitment to improve the competitiveness of the Irish economy. OECD benchmarks show that we are in line with our European peers. The recent National Competitiveness Council report found that fixed telecoms was the only area of competitiveness among Irish utilities. Eircom was very proud of that, and so should the industry. The committee can take some comfort in the fact that fixed-line telecoms in a very high input cost economy are delivering real competitiveness for businesses, individuals and both heavy and light users.
Our billing process is complex, but it is transparent. I advise the committee that billing has become exponentially more complex as we have moved from a monopoly situation to one with 40 telecoms companies providing many different products, many of whom are billed through Eircom's billing systems. The volumes are huge, but our prices are regulated, published and itemised, and there is a significant increase in complexity. Eircom's record on billing is very solid, and we want to keep it like that. We have processes that identify errors, but I cannot guarantee to the committee that there will be none in our billing.
There are errors in every billing system. The issue is how we deal with them. First, we should ensure that they do not get through to charges for customers. Second, we should react promptly and professionally. We have identified one major issue of systematic overcharging which was a billing error in the past five years. We dealt with it in an exemplary fashion. The recovery of the costs of our billing system is largely controlled by the regulator. We would very much like to invest huge amounts in gold-plating systems, but regulators do not allow that for a good reason, namely, to keep prices down.
Let us turn to page 5. I emphasise my earlier point that prices have fallen by 18% in real terms since 1997, a 47% reduction in real terms. That is to quote from the National Competitiveness Council. If we apply the same reductions to a pint of Guinness, for example, it would cost one just over €2 today, as opposed to the actual price of €3.60. The Irish Times would cost 86 cent. We have delivered real value. All the data that we are using are not ours but those of ComReg. The charts on page 6 show that the telephone bill is competitive. The residential bill is in line with the European average, and the business bill is well below it.
Slide 7 shows the cost for connecting to Eircom's network, an issue that arose last January. How expensive is it to use Eircom's network? As Ireland's largest telecoms company, employing 7,500 people in every town and village in Ireland, the costs that it levies for connection are the lowest of any operator in the market. The overall cost for any operator to connect to Eircom, even if the controversial LLU charge is included, is at the European average. That is an extremely important point I wish to emphasise to the committee because members will hear, inter alia, that Eircom charges are too expensive. It is a public limited company and we do not issue data that is not accurate. I am showing the committee that the cost of calls connecting to the Eircom network is by far the cheapest. Esat BT’s charges, for example, are 180% higher. It is important for the committee to know that both at retail level customers get good value and so do other operators, at the wholesale level.
Turning to page 9, dealing with billing issues, I could list a whole series of numbers, and we can talk of 11 million bills being issued etc., but it is a complex operation. We heard the incident today about the ESB, but most billing systems have not been designed for the complexity of products they deal with. The key issue is how this is to be managed and when and how to invest in billing systems to ensure they can cope with what is required. On page 10, in terms of Eircom's pricing and billing obligations, the company is required by regulation to publish its price changes. Seven days in advance of publication we notify ComReg and then give 21 days' notice to allow competitors in the market to see our prices and compete. We meet our legal and regulatory obligations and all our prices are accurate, comprehensive and accessible. We believe we are the most heavily regulated company in this country and probably the most heavily audited, so we can confidently assert that our prices are accurate, comprehensive and accessible. This does not mean they are absolutely right 100% of the time. Are they right 99.98% of the time? Yes, probably.
Charging information shows all the different levels of price. Customers are notified of price changes through press releases and sales and marketing collateral. Price comparisons with other operators are done rarely. When they are done we do not indicate Eircom's cheapest prices versus competitors' standard prices. We ensure the customers understand what they are paying for and terms and conditions are highlighted. We provide itemised billing free of charge on request, which shows every single item in a bill. The next page contains the graphics of a bill. If any member of the committee is not in receipt of an Eircom telephone bill, we will gladly make them available. The bill is an impressive document and is extremely clear in terms of design, layout and usability. In addition to this, itemisation may be requested.
I now wish to deal with the issue of the overcharging, which arose during the summer, and which is the subject of page 13.
Mr. McRedmond talked about notifying customers. Eircom notifies its customers of price increases and different charges though the public press. They are notified through their accounts or a letter is sent.
Mr. McRedmond
We notify them through the public press, but the practice is to notify them in bill inserts if prices are to be increased.
To be clear, if Eircom was increasing its prices tomorrow morning and I was a customer, I would receive a note to indicate this.
Mr. McRedmond
No, we put a notice in the newspapers, not a press release. In practice we inform customers of price increases when we issue bills, by means of inserts. I will have to check whether we do that in every instance and whether it is a regulatory requirement.
I have a couple of questions to ask Mr. McRedmond later on that.
Mr. McRedmond
Page 13 addresses the issue of management charges. We found we had a loophole in our provisioning systems, which would allow the customer to order the same product twice, for example, a call answering service. One person in a house could order it, as could another. Eircom would take both orders and the household would be charged twice, even though the product could only be used once. That is what the issue was about. It came to light when the talk time product was introduced. This a bundle product where a statutory rate is paid for a certain amount of minutes, along with line rental and call answering services. When customers got their first bills for this, two of them called to complain they were already being charged for call answering. Eircom said that was correct as it was on the system and these customers asserted that as they had ordered it as part of this package, they should only be charged once.
Eircom was notified of this in the middle of July. A steering group was immediately set up and ComReg was informed within a week of the company being notified, having first ensured that an issue existed which had to be addressed. Having identified the issue as something that arose as part of the new billing product, Eircom postulated that perhaps this loophole might have had an effect in the past. We went through 12 years' billing records, which dates back to the time when call answering services were first introduced, and discovered a number of instances where people had managed to order the same service twice and had been billed accordingly. We have identified all of those. We informed ComReg and published a notice in the newspapers, apologising to customers. We notified customers that not only would they receive a refund, but also credit to the same amount again, as a goodwill gesture, because of the error which led to them being overcharged. We very much regret that it occurred. However, there will be errors. It is our first major error in terms of overcharging for a number of years. We believe we handled it responsibly, properly and promptly.
On that point, was there any independent audit or verification of Eircom's look-back? In other words, did ComReg or any independent agency participate in the look-back?
Mr. McRedmond
I am not aware that they did. However, all of our numbers are open to be checked and scrutinised because there are approximately three or four different audits throughout the year. We are also subject to internal audit and ComReg, at any time, has the power, and uses it, to spot check any telephone bill, service, pricing or provision. In this regard it frequently checks the different services we have on offer. I cannot be sure that it was done in this case. Page 14 sets out the advertisement that appeared in the newspapers.
I am aware there may be a number of questions, but I would like to finish on broadband because there has been a considerable degree of controversy and some misrepresentation on these issues. It is important for the committee to know Eircom's position on this. Page 16 contains a summary. We have delivered on the commitments and the key one, namely, the target of 100,000 users was first publicly made to the committee in July 2003. According to EFTA, which is the European body that measures this, independent of Eircom, it is the third fastest growth rate in Europe. We will achieve the 100,000 target before December 2004. I am confident this will be done within the next two to three weeks. Yesterday, for example, we took 899 orders for broadband, so the momentum is phenomenal.
The other public commitment made by Eircom is for all towns to be covered with broadband by March 2005. That has virtually been completed and they will all be covered by March 2005, that is, all towns with a population of above 1,500. We have maintained our pricing at the European average. That is our standard pricing. We believe, because of the amount of promotion, that Eircom's actual pricing is well below that level.
The company has generated significant momentum in the market and driven broadband through wholesale promotions. Every other operator gets a bounty for selling broadband which it can pass on to its customers and typically does so in the form of promotions or rent-free periods. We have our own retail promotions. We dominated the airwaves to advertise this product and ensure everybody knows about it, and are proud of our achievement. We will celebrate when we hit the target of 100,000 and then set a new target for broadband.
There has been far too much negative comment around what has happened. We were late to start but, having started, Eircom and its 7,500 employees have pulled out all the stops. In almost every instance Eircom has behaved extremely well to develop this market against a background of considerable criticism. We look forward to this committee's support, having established our credibility in delivering broadband. That entails a marked degree of frustration which is the problem of success. Where one heavily promotes a very good and keenly priced product, people want it. We are as frustrated as those people who cannot get it because they could be paying customers of ours. We want to address those issues. Two areas of supply need to be completed: first, broadband may be available but not everyone can receive the service. Second, broadband is not available in rural areas outside towns with a population of less than 1,500.
We have considerable momentum in this market and can develop further if we get the support of politicians, Government and the industry. We have worked well with the industry and applaud the efforts of Esat BT, among others, in selling and rolling out broadband. We will hit the target of 100,000 or 6.25%. That figure has often been questioned on radio. It is accurate. It is our network. We know how many lines we have. Our statements must be accurate. The figure reflects the growth demand. When I was last before the committee we were half way through rolling out broadband whereas now we have almost completed it.
In areas where broadband is available eight out of ten lines qualify. The pre-qualification rate of 79.96% may sound like spurious accuracy but it is a measured number representing the percentage of lines qualifying for broadband. Over 1 million lines qualify for broadband which is considerably more than the number of households with PCs.
What is Eircom's definition of broadband?
Mr. McRedmond
Our definition is 512 Kbps as minimum broadband speed. Other definitions in Europe work off speeds as low as 284 Kbps.
Is 512 Kbps available to all the lines that Eircom has enabled?
Mr. McRedmond
Correct. It is available to one million lines. The speed of 512 Kbps is our test criterion. There are three reasons people cannot receive broadband, one of which is distance from the exchange. This can happen anywhere and is a limitation of the technology. While intuitively we might think it is more true in rural areas it can happen easily in urban areas, particularly with overhead lines. The second is poor characteristics in the line at high frequencies. We are testing to see how we can improve that. The third is carriers put on the network to ensure we could provide a telephone service to people quickly which is a good service but does not qualify for broadband.
We are conducting trials in our labs in City West that will deliver significant improvement. We hope they will allow us to deliver DSL broadband to nine out of ten lines in areas that have broadband. The remaining one out of ten is the same as anywhere else in Europe. Our network director commutes from the United Kingdom where he lives in a village 250 metres from his local exchange which has broadband but he cannot get it. There are problems in every country. Our standard will be as good as, if not better than, that in many other European countries. That is the work we are undertaking.
There will always be those who cannot receive broadband for whom we have alternative technologies. Satellite broadband is available everywhere. It has some limitations in use and is not as good as DSL but works as a substitute and we will consider developing wireless and other technologies. We are re-evaluating the areas not covered by broadband. By March 2005 our roll-out will have reached 78% of the population. We are evaluating the remainder and can increase that figure because approximately 88% are commercially viable. That is to say, we can install broadband without having to increase prices to all users, which we would legally be required to do. Our aim is to get broadband to as many people, as cheaply and quickly, as possible.
We can deal with several sites beyond those we have. However, some sites will be uneconomic. In an enlightened move the Government has set aside certain funds to enable rural exchanges under the rural broadband scheme. That could be done more efficiently and we look forward to discussing it with Government. We said publicly we would like to work with the Government to find a way to finish this job and achieve as close to 100% coverage as possible.
In conclusion, and returning to the issues on which the committee invited us to speak, our prices are good value and competitive. Billing processes are complex but transparent. Our record is solid; it is not perfect and we acknowledge and have apologised for the issue that arose in the summer but we dealt with it in exemplary fashion. We are delivering on the broadband commitments made to this committee.
Would Mr. McRedmond address the issue of autodialling? I saw a large advertisement in the newspapers about that recently. Did ComReg also have a role in that?
Mr. McRedmond
Autodiallers are a method of charging for Internet content through a phone. For example, instead of using one's credit card to pay to download music, one can elect on some sites to use an autodialler. This enables the company to ring one at a premium rate and charge for that call. Some autodialler traffic is legitimate and some customers prefer that method of payment. Fraudulent autodiallers constitute a global issue, sometimes known as modem hijacking. In this instance one unwittingly switches on an autodialler which changes the settings on one's computer and constantly rings those premium rate numbers. This is a fairly recent problem.
We have security procedures in place to identify fraud, which for obvious reasons we do not publicise. For example, we monitor unusual traffic patterns, such as a significant increase in traffic to a particular country, line or area. We have cut off approximately 12,000 lines which we believe are used for fraudulent autodialler traffic. Until now our policy was to refund innocent customers for this fraud on a case by case basis because one must identify that the activity was fraudulent, as opposed to wilful, or a deliberate choice. We have now said we will refund innocent victims of this fraud in full, even though there is a considerable cost to Eircom in international settlements. This arises because we have to pay every telecom company along the way that has routed the call. We have to make payouts to those companies, nevertheless we will refund customers.
Has the company's accounts section issued any instructions since this scam became widely known and ComReg took action on it? The experience of Deputies would be that some customers got very stroppyletters on accounts which at first light would seem to have been an autodialer situation? Has the company's accounts section been asked to watch out for these or is it normal to issue very stroppyletters if one misses one's billing period?
Mr. McRedmond
Yes, we have issued instructions. The Deputy is correct that there were issues and that is how a fraud sometimes comes to light, although we have called many customers in advance of billing them, where we have notified the activity, and asked if they are making a good deal of calls to a particular destination. When they say "No", we inform them they may be a victim of this, that they need to check their bills and we will correct them. We have notified the accounts departments in terms of issuing those letters and we understand the concern that must have been caused to some of the Deputies' constituents.
On that point, Mr. McRedmond rightly said that Eircom reacted to the CNSissue in terms of refunding. I had the experience, as I am sure most Deputies have had, of people coming to me in the spring who had been the subject of fraud and had a significant bill. In the one or two cases where I dealt with constituents, there was no sense of them being able to get any refund. It is only in the past month or two when ComReg has pursued it that refunds may be possible. Why is it that in one case, after a week, the company was able to agree to refund, while in the other case, where the customer was completely unwitting and facing a significant cost, it waited so long?
Mr. McRedmond
There are a number of important distinctions which can be made. First, the fraud is a fraud that is perpetrated by a company other than Eircom. It is not Eircom which has perpetrated the fraud and Eircom played no part in perpetrating a fraud. Eircom is simply a telecoms company through which traffic is routed.
Does Eircom benefit from it?
Mr. McRedmond
Eircom could benefit from it but Eircom will not benefit from fraudulent activity, therefore, that is why we refund customers and refund the money. This fraud was not a fraud which Eircom perpetrated and that is the same for every telecoms company everywhere. That is an extremely important distinction. However, we bear responsibility for customers.
Second, it is not nearly as clear cut as the other issue where we identified a process error and we could see what was happening. In this area it was quite difficult to see what was happening and it was difficult to know how much of it was fraudulent activity and whether it could be a one-off error in that person's case. It may have taken us a few months to get to that position.
To clarify the matter for members, Deputy Broughan asked about the triggers. What are the triggers? Are they similar to a credit card company telephoning a person to say he or she has spent €1,000 on his or her credit card yesterday, and asking if he or she was in France yesterday, or has the company got a trigger system where its sees different bills jumping from €10 per day up to €1,000?
Mr. McRedmond
It is done by looking at the call patterns and is not monitored so much by the customers. We get in touch with the customer once we have identified a sudden switch in traffic patterns. However, it is a considerably more difficult fraud to monitor than perhaps some very clear direct credit card frauds. It is also an extremely difficult fraud to monitor because it shows up as minutes, it does not show up as anything else. With premium rate numbers — much of the activity involves premium rate numbers — where people use services and pay for them, those services show up as huge peaks in traffic and tend to move from location to location so that it is very difficult to monitor. I am not qualified to tell the committee exactly how it is done.
The message here today to the committee and to the public we represent is that if one has a high bill, one should telephone the company and, if one can get through, find out about it.
Mr. McRedmond
Correct.
I welcome Mr. McRedmond I refer to page 14 — did that advertisement appear in all the daily newspapers? At the meeting on 28 January 2004, I put a question to Mr. McRedmond regarding equipment for which subscribers were being charged of which they were not aware and I had asked if he would put an advertisement in newspapers. I will not go through the transcript as it would take too long. I asked the amount of revenue collected on such equipment and he said he would get back to me but I have heard nothing from Mr. McRedmond since then, so I hope he does not treat subscribers in the same way as he treats some of the Deputies. Since that time I have received telephone bills but have seen no inserts in them about equipment and what one is charged, including the need to check it. Not all subscribers read newspapers.
On the issue of bill queries, it is a nightmare to telephones Eircom. One will get a recorded message asking one to repeat the question. Nine times out of ten people have baulkedthe calls altogether because they get so frustrated. Mr. McRedmond is in the communications business and we cannot communicate with Eircom. I am not being smart about this. If I had a telephone here today I could give a demonstration of what I mean. It does not work. If one telephones FÁS it is the same story. I encountered an incident yesterday where a doctor's telephone has been out of order over a week and he could not get anybody in Eircom. Eventually I got a technician whom I knew to address the problem. He asked me to try to make contact with the number and I did so.
What is the timescale in the Dublin area for the installation of a new line? From the time a new estate in Dublin is developed how long does it take to install the cables? Recently, The Sunday Business Post carried an article on rebates to subscribers for equipment, secretarial plinths, which are no longer in existence, outdoor bells, secondary sockets and so on. Some of the rebates were quite substantial and one was in the region of €540,000. One company had to engage a solicitor and a consultant to establish what it had and what it did not have and eventually it got a rebate from Eircom to the tune of €540,000. How did that come about? Is it the case that had the company not copped on, it would never have known and would still be charged for equipment it did not have?
At our previous meeting I asked what amount of revenue Eircom is generating for such equipment which is non-existent? To give an example, I had been charged for two telephones and a mail box which I do not have. I discovered this because one of Eircom's competitors visited my place and asked me to produce a bill. It was discovered I did not have the equipment, it was handed back because I bought equipment. I did not know that but I should have known it. Mr. McRedmond said his company is on the ball and that it gives its customers a service second to none. That is not my experience and neither is it the experience of a large number of Eircom customers. It gives me no pleasure to say this.
If I was to telephone Eircom and ask when my telephone will be installed, as I experienced last week in Galway, I would be asked for the order number. Some people do not have an order number. One is told that if one does not have an order number, the company cannot do anything about it.
That is the type of service being provided. I merely want to make Mr. McRedmond aware of this. From the presentation he has given to the committee it seems he is not aware of the frustration his customers are experiencing. Judging by the way Eircom is being managed, it will lose a substantial amount of business to competitors because of this. He stated the company acts promptly and professionally at all times.
I propose we allow Mr. McRedmond answer some of the questions.
I have only a few more, Chairman. How long does it take to repair a fault? Mr. McRedmond stated the company has 7,500 employees. Could he categorise them? What proportion of them work part-time and full-time? Will Mr. McRedmond comment on an article in The Sunday Business Post which stated that Eircom refused a €1.8 billion deal from the Government to extend its broadband coverage?
It was not reported in any of the newspapers of the Independent Group for obvious reasons. We cannot upset Sir Anthony.
Mr. McRedmond
I am sorry that we did not get that information to Deputy Brady. I have got the information here. Some 700,000 customers rent handsets at a price of approximately €2 per month. The rental covers the handset, replacement handsets, fault handling and repair. The cost encompasses providing the service, not only providing the handset. In fact, we replace approximately 50,000 to 60,000 handsets per year with new handsets. In 2000, the management of Eircom tried to exit the rental business because it was barely profitable. It stated it was not profitable and was not worth doing. It tried to exit the business and asked all customers did they wish to buy their handsets. They were going to sell the handsets at £7, or perhaps €7. Fewer than 10% took up that offer. The large majority of customers stated they wanted to keep renting handsets, which was not what the company wanted. Given that response, however, the company stated it would continue to do so. Handset rental is a service customers want. If we ceased handset rental tomorrow, there would be an outcry.
Recently we relaunched handset rental. We had not rented handsets to any new customers since 2000. Recently we put a notice in the telephone bill clearly stating that the customer may cancel the handset rental and cancel the rented equipment. I will investigate why that has not appeared in the Deputy's bill.
What billing period was that?
Mr. McRedmond
It was the billing period in September.
I agree with Deputy Brady.
Mr. McRedmond
There was a notice, which we should make available to the committee, which I have been told was included with every bill, which stated that the customer may cancel the handset rental, buy the existing handset or upgrade the handset. I know that many of these notices have gone out. Very few people have cancelled. I do not have the exact number with me. Most have chosen to upgrade to new cordless decked telephones.
What is the procedure for cancelling a handset?
Mr. McRedmond
The procedure is that one cancels it over the telephone and one is requested to dispose of the existing handset in an environmentally friendly way. Where there is more expensive equipment, we send out packaging with a freepost label so that the equipment may be returned to the company. The procedure for cancelling is as simple as it could be. This is done very much on the basis of the questions the Deputy asked on the last occasion to ensure that would be the case. The process of cancelling is very straightforward.
Customers have chosen to upgrade to decked handsets. They pay no extra money for them. These handsets are very expensive and are good. They provide a great deal of functionality like one would get in a mobile telephone, although they are connected to the fixed line. A huge number of customers are taking up that offer.
On the last occasion, the Deputy raised the issue of equipment rental business and asked were we making huge profits out of this. I have checked our regulatory accounts, which show it as a separate line. Those accounts, which are approved by the regulator, show that the business has a net margin of 8%. While it is probably not a bad business, it would not be viewed by anybody as a hugely profitable business.
Other equipment rental was the issue covered by The Sunday Business Post. Other equipment rental accounts for less than 4% of the overall rental business. It is not a major activity for Eircom. It is not an activity we treat separately but it is probably not something out of which we make money. This other equipment is managed largely through account managers because it relates to business accounts.
I wish to emphasise we do not charge for obsolete equipment. We need customers to tell us if they are not using equipment. On the last occasion the Deputy correctly reminded us that we should be reminding customers to check their equipment. Account managers are informing customers and going through all the equipment being used. We inform businesses and do not charge for obsolete or non-existent equipment. We only charge for equipment that we have sent to the customer, unless there is a error. As I stated earlier, errors can occur, in which case we would refund.
The Deputy referred to a matter raised by The Sunday Business Post. I would have to answer separately the issue of the refund, the amount of the refund and how that happened. I would not answer it here anyway because it would be an issue with an individual customer. I will get back to the Deputy. I must make sure I can talk to him about it. I would not talk publicly about a customer’s account. I also do not have the details here. I refute any allegations that we are trying to make money out of obsolete or non-existent equipment. We are a professional, public limited company. There are standards which we must maintain and I believe we do so. If we slip, then we must make sure we refund the customer and deal with that properly.
Did you mention that 700,000 customers are renting equipment from Eircom?
Mr. McRedmond
Yes.
It costs €2 per month for a single piece of equipment.
Mr. McRedmond
Yes.
Obviously rental charge varies depending on the type of equipment concerned.
Mr. McRedmond
Yes.
Would Eircom's income from it be approximately €16.8 million per annum?
Mr. McRedmond
Yes.
There is an 8% margin on that.
Mr. McRedmond
Yes.
That is for replacing handsets, etc. If something happens to my handset tomorrow, will an Eircom technician replace it free of charge or will there be a call-out charge?
Mr. McRedmond
In such a case, you would be sent a new handset. A handset requires no installation.
If there was a crackle to be heard from the phone and the customer, who did not know whether the copper or the instrument was at fault, asked for somebody to fix the telephone, am I correct in saying that a technician would come to the house?
Mr. McRedmond
Yes.
The technician would discover that the fault was with the handset or the cable. As you will be aware, most of the faults lie in the cables. He would rectify the fault. Would Eircom also charge for the call-out to ascertain what was wrong in the first case?
Mr. McRedmond
I believe that is covered by the cost of the rental but I would need to confirm that. As far as I am aware, in nearly all cases we simply replace the handset. If there were an issue concerning the handset, we would send the handset out first. We would advise the customer to change handset because it is more cost-effective.
Did Mr. McRedmond answer the other question?
Mr. McRedmond
On the 1901 prefix, I must accept what the Deputy says. This is an extremely difficult issue. Many companies face it when they introduce voice recognition technology. We recently spoke to the person who led the project and who completed the same project in Telecom New Zealand and were informed that it is very difficult at first for a couple of reasons. First, the voice recognition technology needs to adapt to the particular environment. Second, customers, including me, do not particularly like such technology. However, we introduce it because we have an obligation to keep our costs as low as possible so telecom services can be affordable for everyone in the country. We have reduced our head count quite dramatically and, as a consequence, we must find other ways of doing things. We are assured customers will like the new system once they get used to it because it should ensure complaints are dealt with and repairs are made more quickly. It means that a service that was available only during certain hours is now available 24 hours per day, seven days per week. There are some benefits to the system but I accept the Deputy's contention that there are some teething issues.
We are currently expediting a feature that would allow customers to simply press a button and switch to an operator who could talk to them. However, we are trying all the time to strike a balance between reducing costs, so the service can be efficient and affordable for people, and at the same time providing a service. We will not always get it right. I accept what the Deputy has to say and I will pass on to my colleagues the feedback of the committee to the effect that we need to ensure we are very aware of this issue.
Did the company do a survey of its customers to establish how they felt about the new system it introduced?
Mr. McRedmond
We monitor the calls. We do a number of customer research tests and monitor the levels of satisfaction. The system has only been introduced very recently so it is too soon to say whether it is working.
Does Eircom survey customers who transfer to another network, for example?
Mr. McRedmond
Do we ever contact them?
Yes. If a customer leaves Eircom tomorrow, does Eircom find out why?
I am afraid the figure of 700,000 customers has dropped to 699,999 because I realised I have been paying for a phone that I have not had for five years. I telephoned Eircom today and its new voice recognition technology worked for me for the first time. Deputy Martin Brady may be referring to the fact that there was no voice recognition system in operation six months ago, at which time I was on a constant loop if I telephoned and could never get to speak to someone. When did the new system go on-line?
Mr. McRedmond
I believe it was two months ago. I would encourage the Deputy to explore the benefits of handset rental to see if he wants to retain the service.
I accept the point on notifying customers. I will look into this because I would be concerned if the relevant information were not included in every bill.
We will move on.
Many customers are complaining that they cannot get faults repaired. This is a very important matter.
Mr. McRedmond
There are two service issues to be considered in this regard. I do not have the relevant statistics because I was not aware we would be covering the matter today.
Will Mr. McRedmond outline the procedure involved in having faults repaired?
Mr. McRedmond
Having looked at data on provision and repair yesterday, I know that we do not have an issue on the network side of the business in that respect, as demonstrated by the engineers' reports and statistics. Calls are recorded——
Why did a medical practitioner have to wait a week to have a fault on a line repaired?
Mr. McRedmond
I cannot answer that.
With all due respect, we are discussing prices. It is not fair on Mr. McRedmond to discuss other topics if he does not have the relevant information. Will Deputy Martin Brady communicate privately with Mr. McRedmond on the matter in question? The Deputy will provide the name of the person concerned.
Mr. McRedmond
I will address the matter with the Deputy.
At the recent AGM, the chairman of Eircom said the company has been "overly picked on and picked over" and "over-regulated". Does Mr. McRedmond agree with these sentiments? I do not agree with them. Mr. McRedmond stated that, in real terms, Eircom prices have reduced by 47% since 1997. Will he expand on this? It may be because call costs decreased due to competition, yet Eircom has no competition in terms of line rental. It is true that the cost of line rental since 1997 — the date to which Mr. McRedmond referred — has increased by 60%. There is a captive market because there is no competition in this field. Eircom has the second highest charge, at €16.81, of the 15 states that were members of the EU before last May. I understand that ComReg has dictated that a new fixed-line charge of €14.65 be put in place. When is this likely to happen?
The European Commission mandated unbundling the loop as far back as January 2001. Last year, this was the subject of proceedings in the High Court involving Eircom and ComReg. Mr. McRedmond will have to concede that unbundling the loop has been a disaster. The only organisation that has resorted to it has been Eircom's competitor, Esat BT, in respect of 2,500 business customers. It is argued that it would be totally uneconomical for Eircom to unbundle the loop for any of its competitors in respect of the ordinary customer as opposed to the business customer. The rates associated with unbundling the loop were agreed between Eircom and ComReg, and Eircom's competitors consider them to be very unfair. The unbundling of the loop and the directive have become a bit of a farce at this stage. People should be honest enough to say it will not happen.
On broadband, Mr. McRedmond has said his company will applaud itself at the end of the year if it achieves a target of 100,000 connections. The Minister stated recently at a telecommunications conference that he expects 500,000 people to have access to broadband by December 2006. I do not know whether there were discussions between Eircom and the Government on how this will be achieved. What are Mr. McRedmond's views on it considering Eircom's end-of-year target and the fact that other competitors are pretty small in the broadband stakes?
I can understand Deputy Martin Brady's frustration. I recently tried to obtain a reply to a simple query on fixed-line charges pertaining to my phone but eventually I gave up in frustration. Eircom is not alone in this matter. The billing process of the ESB, for example, is no longer administered from one's local office. One used to be able to telephone the friendly girl in the office in Newcastlewest and ask why the meter was being read only twice per month or make arrangements to have one's meter read if one were moving house. The current system, the voice recognition system, operates differently and if one's query deviates from the norm, frustration creeps in. While it might be argued that its purpose is to offer a cheaper rate to customers, many of the bigger organisations are forgetting about consumer relations and their customers. Will Mr. McRedmond comment on Eircom's high fixed-line charge, in respect of which it has a captive market?
Mr. McRedmond
I will answer each question in turn. I was first asked if I agreed with the Chairman's comments. Yes, I do. The Chairman asked if we were overly picked-on. Eircom is not always considered in the same light as other companies, but we are just another company. I believe Microsoft, Dell or some fancy inward investor is typically looked upon much more kindly when, in fact, we are a major employer. We employ 7,500 people and provide telecoms services throughout the country. We do not cherry-pick like other operators who can come in and do so. I do not have anything against them doing it, but we do not confine ourselves to going after expensive high value customers.
We provide services in every village and town and we feel very passionate and committed to doing that. One should look at our record as a public limited company and how we are considered in the press abroad, as a company that came back to the public market from almost a near-death experience. I accept there are controversies and issues, which it was right for people to cover and criticise but, overall, there is a considerable success around Eircom which has not been highlighted. I would not go so far as to say Eircom has been overly criticised but would say that there may not have been a significant enough awareness of what Eircom has achieved.
In terms of delivering prices as a utility — the prices are as I informed the committee — and in terms of what consumers pay we are delivering very good value. That is very hard to do in a high input cost economy. Eircom's record is strong in regard to the Government's original four reasons for privatising the company. I believe the company has done well, as do my colleagues. Of course we should be open to criticism. We respect criticism and would, I hope, respond to it.
Line rental is something which we have covered before. There are two elements to our network. One is the access network, which is very expensive to provide. I invite committee members to go out on the road with Eircom to show them why it is expensive in terms of planning and other issues. Deputy Broughan raised the question of accessing housing estates. We cannot get lines into some villages and housing estates at present and we cannot open in certain housing estates because we are not designated as an essential service.
Is it the case that Eircom will not spend the money on new exchanges because the money was taken out of the company by venture capitalists?
Mr. McRedmond
That is incorrect.
It is not incorrect. What about Athy, County Kildare?
Mr. McRedmond
We could not open in Athy, County Kildare, because we want to put in an RSU, which is a small exchange, in which we are willing to invest, but we cannot get the land to do it. It is not a cost or investment issue. Can the Deputy imagine a telecoms company not wanting to go into a housing estate? That is why those issues are outstanding. Our level of investment is 12.2% of sales, which is above the average level of investment of our 15 European member state counterparts prior to the recent accession of the new member states.
I thought that investment was provided when it was in State ownership.
Mr. McRedmond
I beg the Senator's pardon. The annual level of investment was above the EU average. It is important to say that. I understand members' concerns around the issues of money being paid to venture capitalists. Members are entitled to raise the issue, but in terms of answering the question about investment, our investment levels are above the average of our 15 peers in the European Union.
At the meeting we had in January last year the implication I received is that investment was in the order of €200 million. A report in The Sunday Business Post on 7 March on the back of a Pittsburgh report stated investment in the access network was inadequate. This was an internal document where it was reported that the level of investment in the access network was only around €105 million, which was not sufficient to provide the necessary level of service.
Smart Telecom, a competitor of Eircom, provided us with documentation which clearly appeared to show Eircom's investment had crashed through the floor in the past three or four years, in particular since the take-over and refinancing etc. of the company by the venture capitalists. Does the company not have a universal service obligation to provide lines to new estates? One of the many examples of feedback I received was that young couples in a new estate in Athy, County Kildare, were waiting for months. This reminded me of something that would have happened in 1979. Dr. Conor Cruise O'Brien was Minister for Posts and Telegraphs and we were a laughing stock. Have we gone backwards with Eircom rather than forward?
Mr. McRedmond
The committee can either choose to believe me or not. The best thing it can do is get telecoms designated as an essential service and then members will see we can get into places which we cannot currently access. It would be insanity for a telecoms company not to want to provide service to a housing estate.
Why can Eircom not access some places?
Mr. McRedmond
We cannot do so because we are not an essential service. Lines into estates do not have to be taken into account by builders in their planning.
Surely that is a selling point for their houses?
Mr. McRedmond
That might well be an issue but——
Have they refused to give Eircom access?
Mr. McRedmond
We have found access very difficult.
That is not the point. Have builders refused access? I have never heard of this before.
I was one of the parties to a hearing at An Bord Pleanála dealing with the north fringe development, a large development of what amounts to a new city on the north fringe, which is the area represented by Deputy Brady and I. It specifically states that the highest level of broadband and other communications will be placed in situ in the estates. The pitch has been cleared for Eircom.
Mr. McRedmond
That is excellent. That is what we would like to do.
Will Mr. McRedmond instance the number of cases where Eircom has been refused access? We should have that information.
Mr. McRedmond
I cannot, but I will get back to the Deputy and give him information on the cases. We would very much welcome——
Did Mr. McRedmond receive our report on broadband which was launched last March? I was on sick leave but I believe Mr. McRedmond was present at the relevant meeting of the committee.
Mr. McRedmond
Yes, I did.
One of its recommendations was to ensure we would have a pipe to every house. Deputy Broughan is correct about the situation 30 years ago. There is a pipe going into every house for a telephone line so if there is a problem in that regard the committee would be interested in hearing about it.
Regarding unbundling the loop, in a recent statement Mr. McRedmond described this as a red herring.
Mr. McRedmond
Did I?
Mr. McRedmond was quoted in a newspaper as saying that. It was stated that Mr. McRedmond, European commercial director, described unbundling as a red herring for the whole industry.
Mr. McRedmond
I am not sure in what context I said that, but what I can say about unbundling and the local loop is that this is a Europe-wide issue. In some countries unbundling takes place and in others it does not. Typically the countries in which unbundling has worked is where they do not have what is called a re-seller regime which we have here. In other words, it is much easier for other operators to re-sell our network and not have to invest.
Deputy Broughan referred to Smart Telecom stating we had reduced our level of investment. I suggest he looks at its recent prospectus where it made very clear that none of the funds it raised would be used for investment in telecoms, it would be used for customer marketing because it could use existing infrastructure. That is reasonable and it is the choice of that company but this company is investing and we are doing so at the stated levels.
In terms of local loop unbundling, the local loop price is a difficult issue. The price is relevant because it underpins a great deal of prices in the access network. I cannot answer why other companies will not unbundle except to say that being a re-seller in this country is probably much more attractive.
One does not need to employ engineers. Recently, a re-seller which opened here made a virtue of the fact that it will employ seven people. The company will re-sell services which are, basically, part of Eircom's network. This is one of the major reasons unbundling does not occur.
There is considerable competition and the Deputy is correct that it has reduced prices for fixed line telecommunications services. The view, one which we covered last time, that Eircom's access prices have increased because we have a monopoly in that area is wholly wrong. The only reason they have increased is that we are legally obliged to recover the cost of the access network. To do this, we had to reduce call prices because we are subject to a price cap which requires us to ensure consumers are not paying more. The prices in total paid by wholesalers — companies using Eircom's network — and consumers are not above the European average. Even if one cost is expensive and another very cheap, the overall effect is that neither group is paying above the European average. This is very good for a service in Ireland.
Will the new fixed line charge of €14.65 under consideration by ComReg come into effect?
Mr. McRedmond
That is a matter for ComReg. I understand it is consulting on the matter and is due to report back.
The wholesale fixed line charge is supposed to drop from €16.81 to €14.65.
Mr. McRedmond
We do not set the rate. That is a matter for ComReg.
I welcome Mr. McRedmond. Many issues have been addressed. I speak as an Eircom customer who believes the company plays a key role in telecommunications. It is important for the joint committee that Eircom delivers on its national responsibilities and many of us believe this has not been the case.
I will repeat Deputy Brady's final question. Is it the case that in 2003, Eircom had extensive discussions with Mr. Ira Magaziner of Eircomand SJS, who attended the joint committee on behalf of the then Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, on developing a crash programme to roll out broadband? The matter was reported in The Sunday Business Post on 1 November but Independent Newspapers signally failed to report on it the following day.
Mr. Magaziner did not appear before the joint committee.
I apologise. I understand he sent us documents. Was it put to Eircom that it needed to get the finger out? The company must appreciate that there is growing alarm at the apparent complete logjam in the roll-out of broadband. Korea, Japan and many other countries are rapidly rising to the top of the OECD broadband league.
Mr. McRedmond probably reads the Financial Times. Last week, it featured an article on the DSL network forum in which Ireland did not even figure in the top 20 or 25 countries. We are not even in the competition not to speak of the Premiership, to use English football terminology. This matter should have been reported to Dáil Éireann. I tried to raise it with the Taoiseach yesterday because when the previous Minister, Deputy Dermot Ahern, appeared before the joint committee he glibly waffled about the MAN network and other issues without addressing the roll-out of broadband by Eircom. Was an attempt made to reach a deal? The agreement in question appeared to be a sweetheart deal as it referred to matters such as Eircom’s debt.
Sir Anthony O'Reilly, the chairperson of Eircom, appears to have a sense of humour. He has been quoted extensively recently asking that Vodafone and O2 allow Eircom to become a virtual mobile network operator by using their networks for what appeared to be a keen discount rate. He is the chairperson of the company which, as Mr. McRedmond told my colleague, appears to be ruthlessly opposed to every effort by ComReg to unbundle the exchanges and his own network. While I accept Sir Anthony is one of our greatest entrepreneurs, he is displaying a sense of humour on this matter, making such a funny request.
I am aware that many moves are under way. We read, for example, that BT may enter into some form of linked, mobile fixed line network and that there may be other opportunities for the company. We receive various figures related to the quality test indicator. We have e-mails coming at us like confetti from constituents all over the country. The other week, a man from Rathmore, County Kerry, screamed at me about this issue. Lines cannot be enabled——
Being from County Cork, I am next door to the man in question.
We receive horrific figures of between 30% and 50% for the quality test indicator. ComReg appears to know the true figures but neither it nor Eircom has ever published them. Will the Minister provide them to the joint committee?
Mr. McRedmond
May I respond?
I will finish my point. The Minister informed us of a figure of approximately 9% the other week, which does not seem to be correct. The reaction we receive from interested, publicly orientated interest groups, such as Ireland Offline, is that the current position is a disaster and Ireland is being left far behind. This is our concern.
As the Chairman noted, the joint committee published a report which has been lying on the shelf for six months or more. We are becoming increasingly exasperated. While Eircom does not have a universal service obligation in broadband provision, it is the flagship telecommunications company in Ireland. The 7,000 jobs it provides are appreciated, as is its role in the community, but it must get the finger out. We have been informed that the Minister's targets will not be met. The targets of his predecessor were a joke which would have been impossible to meet. Mr. McRedmond referred to a figure of 899 orders. Were they received in one day or one week?
Mr. McRedmond
The figure referred to yesterday.
The average daily number of orders is 900.
Mr. McRedmond
Yesterday was a very strong day but orders are running at between 600 and 900 per day.
How many orders are received weekly and monthly?
Mr. McRedmond
We receive as many as 3,000 orders per week, with an even higher number some weeks. The pace is strongly picking up. I accept the exasperation of those who cannot get broadband. Eircom is a publicly limited company. If we present a figure to the joint committee indicating that 79.96% of lines qualify, I ask members to accept it. We are not misrepresenting data but trying to be as open as possible because we believe broadband is a major success. We accept we started late. This is the reason we are not yet in the table of 25 countries the Deputy mentioned but we will be on it, particularly given the rate of progress we are achieving.
We have also stated that other things need to be done. We need to complete the roll-out and start addressing the other major issues driving the digital divide. It is driven more by PC usage than broadband.
Regarding the target, there is not a ghost of a chance that we will meet the target of 320,000 homes and businesses using broadband by mid-2005, as announced by the previous Minister, Deputy Dermot Ahern. Is that correct?
Mr. McRedmond
I cannot answer for the target. Eircom will not reach it but we are not the Government.
As Eircom is not the only supplier of these services, it would be wrong to ask Mr. McRedmond to speak for the sector.
Mr. McRedmond
We have our own targets. Deputy Broughan also asked about the test indicator. Ireland Offline is a small, vocal group which is entitled to comment as it wishes. I suggest members look at their website to get a flavour of what they do. We are behaving extremely responsibly in terms of how we roll out broadband and are very grateful for the 100,000 customers we have. While exasperation will exist where there is a successful product, the momentum is continuing to build. We are not stuck in a log-jam but are moving at an incredible pace to make up the ground we need to. Eircom is a commercial company and will do what is right for our customers and shareholders. We make no apology for that. Government targets are an issue for itself for which we cannot be responsible.
The other question was to Mr. McRedmond and its subject formed the basis of a parliamentary question yesterday submitted by Deputy Durkan who I presume received a response.
Mr. McRedmond
We recorded our position in The Sunday Business Post article which is why it was extraordinary that the newspaper managed to produce a headline. We stated that no offer was made to us and no deal was struck. While we met Mr. Ira Magaziner, as did many other telecommunications companies, and had very general discussions, we have such meetings frequently with people who come and go from this town to discuss various issues. That is all that happened. As we have made clear, no offer was made. If members ask the Government, they will receive the same answer. There was no offer and no deal and I did not recognise the issues raised.
The reply to Deputy Durkan's parliamentary question states that very clearly also. If anyone wishes to examine it, the question's reference number is 27812/04.
Mr. McRedmond is right that Eircom is a large, publicly quoted company. How does he feel about dealing with Government when he sees leaked Cabinet documents appearing in the press which have not come from Eircom? What is the experience of working in a publicly quoted company and seeing stories leaked in that manner?
Mr. McRedmond
I think that its documentation and comments constitute a matter for Government. We simply do our job which, in this instance, is to roll out broadband. We are accomplishing that and doing our bit. I have nothing further to say on that.
Were the talks confidential?
Mr. McRedmond
We held discussions and most of the discussions we hold are covered by some form of confidentiality.
Is it part of normal business practice to see Cabinet documents on matters pertaining to the company in newspapers?
Mr. McRedmond
I cannot answer that.
Will I read the reply to the parliamentary question?
People can avail of it on the Internet. The newspaper article implies that the information it contained came from Cabinet documents.
The Minister responded to that yesterday and made clear on the website that the claims in The Sunday Business Post are untrue. Do members have a copy?
Not yet. Perhaps it could be photocopied and circulated to members.
Answers to parliamentary questions are notorious for not giving much information.
A two-page reply was provided. Do you want to read it Deputy Broughan?
In reference to the article in The Sunday Business Post, is it true that Eircom was somewhat slow in starting to roll out broadband? As Mr. McRedmond admitted that himself, I presume it is true.
Mr. McRedmond
I admit the start of broadband roll-out was late in this country.
Why?
Mr. McRedmond
For reasons we have covered previously. We had developed a product with a high specification over which television would have been rebroadcast as part of a general service to be installed in houses. The service would have included telephone, television and Internet services. For the product to be effective, we were required to apply for a broadcast licence which we were refused by the regulator after very lengthy discussions. As I was not involved at the time, I must provide members with the version I have heard. As a consequence of being refused the licence, the DSL product in question was not affordable. We stripped it out and rolled out instead low-cost DSL which is the type of broadband we have now and is affordable for people.
As a telecommunications provider, does Eircom recognise the responsibility placed on every operator to provide to industry and the domestic sector the most up-to-date service possible to allow us to compete effectively with our European competitors? How does Eircom square that responsibility with Ireland's standing in the European league at thirteenth out of 14 places when ten years ago we were in second or third place?
Mr. McRedmond
The Deputy is only picking one item, which is broadband. Ireland is the second cheapest country in Europe for national bandwidth for leased lines, which is what most companies use. Ireland is the cheapest country in Europe for international leased lines, which most companies use also. We can claim to support competitiveness in this country.
Mr. McRedmond is selecting elements which reflect well on Eircom.
Mr. McRedmond
Absolutely.
While Mr. McRedmond, of course, takes that approach, I am asking how he addresses the charge that the level of investment by Eircom has not kept pace with the requirements of today's market.
Mr. McRedmond
I have addressed the level of investment. This is not a selective exercise as investment overall is at issue. Investment has been slightly above the average level of our European peers. If the level of investment were at the top of the table, one would end up with sky-high telecommunications prices. If the level of investment were at rock bottom, one would have a telephone service which did not work. Eircom has invested very prudently and well.
On competitiveness, Ireland has performed extremely well in terms of inward investment compared to other countries, though the Deputy is probably more responsible for that than Eircom. Clearly, Eircom's actions have not been a disincentive to investment. Eircom contributes to competitiveness. Given the price indices of other countries in terms of fixed-line telecommunications, a foreign investor considering Ireland would judge it a good place to go.
If one is a foreign investor considering Ireland, one will want to know what is the quality of the service which is likely to be made available and to see who are the competitors. If Ireland is in the middle rank, investors will not look favourably on it as a location. The responsibility rests with Eircom to balance low-cost, selective lines and the provision of the high-quality service required by customers.
While I will deal with my parliamentary question at another time, I point out that Eircom has a responsibility to invest in infrastructure rather than when required. Infrastructure may have to be provided long before it is needed at the coalface. What is the company doing about that?
Mr. McRedmond
As I have said repeatedly, we are investing at a level above the average among our European peers. To invest at the top end would raise telecommunication prices and make services unaffordable. While the Deputy tells me it is Eircom's job to invest, which it does, I tell him it is his job to encourage investment and ensure that Eircom can make a return on its expenditure. To clamour constantly that we should reduce, for example, the price of local loop unbundling and forcing us to sell below cost does nothing to encourage investment. Eircom is the major investor in fixed-line telecommunications in Ireland. If the committee wants to see the best services at reasonable prices, an environment must be created to ensure there will be a return on investment.
I am aware it is alleged that there is a lack of authenticity in the article in The Sunday Business Post, but time will tell. The article suggested that a deal was arranged whereby Eircom would receive certain concessions. Mr. McRedmond has mentioned that some discussions took place, although not necessarily along those lines. Did discussions which were somewhat similar to those referred to in the article in The Sunday Business Post take place? If so, did they comply with EU competition rules and regulations?
Mr. McRedmond
That is possibly the third question I have been asked about the article in The Sunday Business Post. We have been very clear in saying that the article was not true. Eircom was not made an offer, there was no deal and there were no negotiations. Having heard the Chairman’s comments, I now believe that the Government considers that the article was not true. That is the end of the debate on the issue, as far as I am concerned.
I will circulate a copy of the reply to the parliamentary question which was mentioned earlier. I suppose Deputy Durkan will be able to raise it in another forum.
I will pursue it in another forum as well.
The Deputy has also received an answer from Mr. McRedmond.
I realise that we are putting Mr. McRedmond in a difficult position because he cannot say anything. The article in question, which was published in a Sunday newspaper that I respect, contained details from leaked Cabinet documents and references from senior Government sources. That is not the way for the State to do its business with companies or individuals. I appreciate that we may be putting Mr. McRedmond in a difficult position, as he cannot say what I was quite happy to say just now.
The Garda is investigating the leak.
The Taoiseach should investigate it.
It is being done. The Deputy will receive a copy of the response to a parliamentary question on the matter. Deputy Ryan should stick to the matter at hand.
I would be interested in seeing how far he has to go.
Can the Deputy focus on the issues under consideration today?
Can Mr. McRedmond give details of the level of investment? I refer to another article in The Sunday Business Post. The committee understands that the level of investment was roughly €200 million per year. The report claimed that it was approximately €117 million per year, with roughly half of that being spent on labour costs rather than new technologies. Can Mr. McRedmond provide some more background detail in that regard? Such detail would be useful, but I appreciate that it may be commercially sensitive.
When Dr. Philip Nolan spoke about the strategic development of the industry during a presentation he made to the joint committee in January 2004, he said that "the fixed telecom industry is migrating mainly to a broadband type environment, that voice is migrating to mobile and that there will be convergence between fixed and mobile". That echoes a recent comment made by the chief executive of BT, Mr. Ben Verwaayen, who said that all services will collapse into one in the new broadband world. As someone who is paying mobile bills, fixed line bills and wireless bills, I cannot wait for that collapse to occur. I have to pay wireless bills because I am one of the approximately 20% of customers who cannot get the service in question. One of my biggest household expenses is communications because I have to pay three bills. When will the services collapse into one? How does Mr. McRedmond think the industry has evolved?
Deputy Broughan asked if the unbundling of the mobile networks will require the reciprocal unbundling of the landline networks. Will we see services of the nature alluded to by Mr. Verwaayen? One could have a single telephone with a chip in it which would function as one's mobile by day and as one's landline by night. When one gets home at night, one would click the telephone into one's landline socket. Are we moving towards such a system?
Eircom should be given credit for achieving 100,000 connections. It said it would do it and it has done so, although I believe they are not all Eircom customers. That is not enough, however. It is nowhere near the telecommunications vision of this committee, for example. Can Mr. McRedmond outline the progress that is being made in respect of such convergence of services?
Mr. McRedmond
The level of investment this year will be slightly over €200 million. It was approximately €190 million last year. I ask the Chairman to allow me a margin of error of approximately €10 million. The Sunday Business Post referred to the Pittsburgh report, which is a document akin to a house survey on one’s house. It was designed to highlight the faults in the network, not to state how good is the network or to indicate the parts of it which work well. Some of the data which were used in the report are three or four years old. The report’s reference to the level of investment relates to one portion of the network, which is the access network. There is also the core network and there are systems. The investment figure of €200 million includes capitalised labour costs — those labour costs which one is required to capitalise. When we compare Eircom to similar European companies, it is a like-for-like comparison because we all work to pretty much the same accounting standards. I assure the committee that we invested €200 million.
I apologise for not answering a question on mobile and unbundling convergence earlier. Eircom's chairman and chief executive have consistently said the company will eventually get back into mobile communications. We want to offer the good value we have brought to fixed line telecommunications and we will do so. Any telecommunications company can use Eircom's network. The difference is that one does not need to unbundle to use a network. We are not talking about unbundling. Anybody can resell Eircom's network by entering into agreements about interconnect prices and various charges. We have a competitive fixed line market because other operators use the network.
I would not say that unbundling is a red herring, but there happens to be a different way of reselling the network. It is just a way of getting a bit deeper. Rather than just marketing, billing and selling, one can also put some equipment into exchanges. It operates at a slightly deeper level. The chairman of Eircom is very serious about getting back into the mobile area. It is not a question of unbundling, but of being able to enter into a commercial agreement as other fixed line operators do with Eircom. We are regulated——
Is the chairman of Eircom not being ironic or a little sarcastic?
Mr. McRedmond
The chairman is being very serious when he says that Eircom will offer a mobile service that will provide good value to consumers. That is the intention.
Does Eircom intend to purchase a licence? The 3G licence is still on ComReg's shelf. Does Eircom intend to build its own network? Does it intend to share with other networks? What is Eircom's intention?
Mr. McRedmond
There is a range of options. As a public company, I do not think Eircom can signal what it intends to do without first signalling it to its shareholders. I cannot tell the committee how we will achieve what we have signalled as an intent.
We have all read various reports in this regard. Eircom is getting back into the mobile telephone business, but it is not building its own network or building a licence. Does Eircom want to buy wholesale minutes from the existing networks?
Mr. McRedmond
Correct. That option has been discussed publicly by the chairman and the chief executive, who have spoken of Eircom as an operator which uses other networks.
Why should Eircom get back into the business without having to build its own network?
Mr. McRedmond
The issue is the exact same as fixed line telecommunications. That is how one gets competition and lower prices.
Is it not different? Eircom was the universal service provider in fixed line business. When the company was bought, its officials knew about its universal service obligation. It is now reversing that. I read somewhere that Sir Anthony O'Reilly was talking about establishing the new Ryanair of mobile telephones. Is that right? Why can Eircom not be the Ryanair of the fixed line business and be competitive in that regard?
Mr. McRedmond
I believe I have gone to considerable pains with the committee to show we are highly competitive in that regard and we deliver highly competitive prices.
We have not called the witnesses here today for the fun of it and I am sure they do not want to be here. Most of the complaints the committee gets relate to Eircom. It gives us no pleasure to have representatives from the company here today to discuss telephone charges, equipment charges and over-billing, regardless of who is right and who is wrong in terms of responsibility in Eircom. While we have other work to do, this meeting is taking place outside our normal schedule because of the hundreds of messages we are getting by e-mail, letter and phone about Eircom, which has a huge problem in PR and public perception. While I do not know whether it has a public relations department or uses a PR company, Eircom has considerable work to do to convince the public it is treating them correctly.
Mr. McRedmond
I understand that. This is one of the reasons we are glad to come here at the invitation of the committee. We want to explain what we are doing and be accountable for that. We go to considerable pains to do it. We are very serious about these issues. We are serious about getting back into mobiles and serious about rolling out broadband. We believe we should be able to achieve those objectives.
Will Mr. McRedmond speak about the VAT rates for accessing Eircom's network? I understand the Supreme Court judgment last year — I am almost an expert on courts now — stated that Eircom should charge 13.5% for access. How much does it charge?
Mr. McRedmond
I cannot remember the exact rate we charge for access, but it is not 13.5%. It is approximately 17.5%
The rates are 13.5% and 21%.
Mr. McRedmond
Yes, 21%. That is right. Discussions have taken place between us and the Revenue on the rates we can charge for access.
How long have those discussions gone on?
Mr. McRedmond
Those discussions have not concluded. The issue is not on the rate charged for access. There is a very complicated rule on what is considered to be just access as opposed to accessing a service.
Is it not true that the Supreme Court has ruled that Eircom should charge 13.5%?
Mr. McRedmond
No, that is not true. The Supreme Court ruled that another company — a cable company I believe — could charge that rate for access. That should be the rate charged for access. The Revenue has a complicated system — I believe it is called the two thirds rule — whereby if approximately two thirds of the service is used for carrying other services then that rate should not apply. The issue is the definition of access. At the moment we are working with the Revenue on this matter. The sooner we can provide those lower prices to our customers the better.
Given that people are now paying 21%, if the Revenue decides this should be13.5%, can the public expect a refund? While this will not affect companies registered for VAT, most of Eircom's customers would not be registered for VAT.
Mr. McRedmond
I believe that is an issue for the Revenue. We need to reach as quickly as possible a conclusion on the issue of what is defined as access.
We will also find out about that matter.
How will the decision by the EU on MVNOs relating to a Finnish operator affect MVNOs in Ireland? While I know Eircom stated earlier it would not give away all its "state" secrets, given the chairman's interest in getting into the mobile market, he will hardly be held back by such an EU ruling. Should we expect Eircom to be in the market to purchase a licence?
Mr. McRedmond
As with all EU regulatory issues, the Finnish ruling is not exactly clear. The EU has defined 18 markets, at least two of which are mobile markets, which should be assessed. In doing that, ComReg has proposed that Vodafone and O have joint dominance. Therefore remedies need to apply and the regulator needs to bring that forward. The regulator has begun the process, which has now been going on for a considerable time. We look forward to the regulator completing the process with the same haste with which it undertakes the regulation of the fixed line market. We are not necessarily looking for the operators to be regulated to the extent that Eircom has been regulated, but we are looking for some fairness in terms of how that happens. I cannot answer the hypothetical question as to whether that ruling might apply.
However, it is a possibility.
What was Eircom's net profit in its last financial year?
Mr. McRedmond
I would have to check the exact net profit of the company last year. However, the net operating profit was pretty much break even last year. On the EBITDA margin, about which the Deputy talked, we made €550 million in EBITDA last year. This is before depreciation and amortisation — before the cost of the network.
Would Eircom not get a tax benefit from the capitalisation of the write-off?
Mr. McRedmond
No, I am not aware of the tax benefit to which the Deputy refers.
What was the dividend to shareholders?
Mr. McRedmond
While I cannot remember the exact amount, at the time of our refinancing in July last year the dividend to shareholders was approximately €530.
Has the company any plans to downsize its staff of some 7,500?
Mr. McRedmond
We stated it is our target to reduce that number to 7,000 some time in the next 18 months — I cannot remember the exact date. We set ourselves a target of 7,000 and we will continue to drive efficiency and see what efficiency can be driven beyond that if necessary.
Will the reduction focus on any particular sector?
Mr. McRedmond
The reduction will be across the company.
Eircom stated that eight out of ten lines would qualify for broadband. While the company stated that 100,000 broadband lines are connected, what does this represent in percentage terms?
Mr. McRedmond
Percentage wise, 100,000 is 6.25% of lines.
Would Mr. McRedmond not agree this is a desperately low figure?
Mr. McRedmond
It is a figure, which we want to increase substantially. However, this is where other telecoms in Europe were a year ago. This is why I say we are catching up. They have now moved ahead. As a percent it is a huge step forward. It is building and getting to base camp.
Of the eight out of ten lines that would qualify, less than two are connected.
Mr. McRedmond
Correct.
Less than two lines out of ten.
Mr. McRedmond
Correct.
Given the number of smaller towns with populations of less than 1,500, a considerable proportion of the country will not have the possibility of getting a broadband connection for years to come.
Mr. McRedmond
There is broadband because satellite broadband is available. Wireless broadband technologies are being developed. In rural areas this is not a feature of Eircom — I emphasise this point. This would be the same in any network anywhere. In some places new versions of DSL have been rolled out. We will upgrade to ensure the latest technology to constantly bridge the divide. We will look at wireless technologies and other ways to access those areas that cannot be accessed using DSL copper. We also hope to work with the rural broadband group schemes and that Eircom will put its money in to see if we can resolve this issue and get as near 100% coverage as possible, if this can be done economically.
Is Eircom disappointed with the comments made by the newly appointed Minister who said that in hindsight the sale of the State asset was regrettable?
Mr. McRedmond
That is a matter for the Minister, not me.
It does not augur well, given the sense of partnership needed for the roll-out of broadband, if that is the comment of the newly appointed Minister for Communications, Marine and Natural Resources on this important development.
Mr. McRedmond
That is a matter for the Minister. On co-operation with the Department and the Government, Eircom looks forward to having a good relationship with them in order that we can achieve our targets.
I have no doubt Deputy Perry will pursue the point in the Chamber. I thank Mr. McRedmond for staying on. He must be exhausted.
Mr. McRedmond is a good battler. I suggest that at its next opportunity to meet Eircom the committee should invite the full team, including the chief executive and the chairperson. I accept Mr. McRedmond played a straight bat today but there are many unanswered questions.
That is a matter for the committee to discuss in private session. I thank Mr. McRedmond for appearing before it. The message from this meeting is that Eircom is issuing a refund to everybody who should be refunded and that it is correcting any errors made in its billing system. It is highlighting different aspects of the system to alert customers to whether they should avail of or continue to keep different services. It is easy to miss a detail on a bill. A customer may not realise he or she is not using a service, even though he or she had requested it. Mr. McRedmond used the word "transparency". I hope to see more of this for the vast majority of customers. I am certain Eircom does not wish to lose customers to other telecom companies.
In Cork Councillor Con O'Leary asked for an 087 number to be barred on his landline and was charged for the service. He wondered why he had to pay for it on a monthly basis and had been reduced to just making local calls. Is this a technical question or can Mr. McRedmond answer it?
Mr. McRedmond
It is a technical question but I will deal with it. Call barring is not untypical. Before I came I checked that other companies, for example, BT in the United Kingdom, charge for the service on a monthly basis. I believe the issue of the mobile number mentioned has been resolved since last June. At that stage, because of geographical numbering, such numbers could not be split. Now they can be split with the result that certain numbers can be barred and not others.
My point is that the customer asked for a bar to be placed on the 087 number in question. Eircom stated it could be done but the customer can now only make local calls.
Mr. McRedmond
That should not happen. I will check the matter.
The customer must pay for the service every month.
Mr. McRedmond
One must pay for the call barring service.
If the customer did not request the service in the first instance, why should he or she have to pay to have it removed?
Mr. McRedmond
The customer is requesting a service on a telecoms network. He or she is then asking that the network be tailored in order that he or she cannot access certain parts. That is what gives rise to the charge.
Will Mr. McRedmond supply further clarification on the matter to the committee?
Mr. McRedmond
I could do so if I am given the details.
We seek information on the charges to be paid and the company's policy on call barring. I thank Mr. McRedmond for appearing before the committee.
I now welcome Mr. Peter Evans and Mr. Michael Connolly of Esat BT. Before we begin, I draw attention to the fact that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee which cannot guarantee any level of privilege to witnesses appearing before it. Furthermore, under the salient rulings of the Chair, members should not comment on, criticise or make charges against a person outside the House or an official, either by name or in such a way as to make him or her identifiable. I advise members that the format is a presentation followed by a question and answer session.
Mr. Peter Evans
I thank the committee for affording Esat BT the opportunity to make a presentation. I am its product director. My colleague, Mr. Michael Connolly, is the head of pricing. In our presentation we will provide some background information on Esat BT; its tariffs and billing practices; issues to do with deregulation and local unbundling, a matter which has been touched on previously; what is at stake for Ireland and the role of the Government and the company.
I will project some slides to give a brief explanation of the role of the company in the Irish market. Esat BT is a full service communications provider. We offer voice and Internet solutions services. We have been involved in the market as Esat since 1994 and are the number two operator in the fixed line marketplace. We have approximately 10% of the market.
We operate under the Esat BT brand in the corporate and consumer voice markets and under the Ireland Online, IOL, brand in the consumer Internet space. We serve all segments of the market — corporate, residential, SME, wholesale, etc. We have approximately 900 full-time employees in offices around the country — Dublin, Limerick, Cork, Galway and Waterford. Since 1997, when the first stage of deregulation was initiated in the Irish market, we have invested over €700 million directly in network infrastructure, broadband fibre and duct.
Our national network is predominately built along the rail network. Fibre-optic and broadband cables are laid directly beside railway tracks. They cover approximately 2,000 kilometres of railway track. They are also laid along roads within metropolitan area networks and also sub-sea to the United Kingdom and the rest of Europe. Esat BT has 40 DSL exchanges unbundled within the country and 23 broadband wireless space stations. Our network interconnects with the Eircom network at local call level. This means that when one of our customers makes a local call from his or her house or business, 85% of the time it connects at primary interconnect level within the Eircom network.
Mr. Connolly will now cover tariffs and billing practices in the company.
Our approach in pricing our products is to have straightforward and clear propositions, whether for business or residential customers. For example, we have a price guarantee for our residential customers. Our approach to tariffs for fixed line calls is to make the 32 counties the local area. We do not arbitrarily divide the country into local and national areas. We have flat rate Internet packages from approximately €10 per month and a three month broadband trial with no strings attached. There are terms and conditions and much small print around the free trial. However, they are extremely fair. Our principle is to deliver what we say on the tin. We are not trying to catch people out and whack them with unexpected charges.
Flat rate voice call charges are a big innovation. We were the first to bring an offer to the market where customers could pay a fixed amount per month for unlimited usage in local and national calls. Again, there are complex terms and conditions around this offer to protect us from abuse. However, unless it is an extreme case, customers get exactly what we say and there is no hidden agenda or charges.
Recently, because of the ComReg single billing initiative, we realised we needed to develop a proposition for recipients of the telephone allowance from the Department of Social and Family Affairs. Our approach was to try to simplify the issue and make it more straightforward and open. We did not want to make it needlessly complex which often happens in telephony. The principle we use when pricing a product or service is to always work to simplify the complexities.
We price aggressively. As a challenger in the market, we need to show clear advantage over the incumbent. We need to show clear benefits to encourage people to avail of our services. Beyond offering prices, we must deliver what we say and do so consistently and without error. To deliver on this commitment, we have spent over €14 million since 2001 on unifying our billing systems into a single or what we call a tier one billing system. In other words, it is a carrier class billing system.
We have disparate billing systems. The Internet business is PostGem. All of these systems need to be brought together. By doing so, we make it easier for us to manage them, reduce the number of bills our customers receive and generally make it easy for them to keep track of their bills.
We have spent €5 million on introducing a carrier class customer relationship management system. This means that when a customer calls Esat, it uses a customer relationship management system to bring all of the information on the customer's account together, for example, name, address, the services of which the customer avails etc. in order that if the customer wants to make a payment, the person to whom he or she is speaking will have access to the necessary information. This system is called a customer relationship management or CRM system. We have spent a lot of money on putting it in place.
Does the company have humans at the end of the telephone line?
Yes, we do. We also use the voice recognition system described by Mr. McRedmond which we have deployed on our call handling systems.
Mr. Evans
One of the principles under which BT operates throughout Europe and the rest of the world is that the customer will always have the opportunity to speak to a person if he or she wants to do so. There will always be an out button from the interactive voice response, IVR, system.
Within how many minutes will they get through to a voice?
Mr. Evans
It can be done at any time. If the customer is getting lost within the voice recognition system, he or she can choose to speak to an operator.
We have invested in an on-line portal for our customers where we bring together the information of interest to them on discount packages and relevant order services etc. This makes it easier for them to access information on their account and the services available to them.
We were instrumental in having a programme launched last year to promote price transparency across the industry. In our response to the review of the CPS market initiated by ComReg we highlighted our belief there was a lack of transparency and much confusion in the market. Customers were starting to lose trust in what telecommunications companies were saying. The perception was they were saying one thing in an advertisement but that what customers got was quite different and that they were being ripped off somewhere along the line. It is in our interest and that of the industry that everybody is as clear and transparent as possible when discussing pricing issues. It was our suggestion which was picked up by ComReg that kicked off a programme to promote price transparency across the industry. We are happy to participate in the programme and proud of the fact that we had a hand in getting it kick-started. Our basic principle — the one we bring to the job of pricing and billing services — is fairness. We want to do what we say we will do and err on the side of the customer.
The next section deals in more general terms with the call market. Some of the issues involved have already been discussed. Call charges have dropped substantially since we entered the market. Since the introduction of competition, the market has enjoyed reductions in call charges. Where there has been no challenge, specifically on access costs, as highlighted, costs have increased.
Eircom retains an unusually high percentage of the overall fixed line market, in excess of 80%. It has an exclusive fixed voice and data contract with the public sector valued at over €150 million per year. There is limited choice for customers in fixed line market access because while they can order lines from other companies, only Eircom can deliver them. Eircom is the only game in town, regardless of who is billing the customer for the line.
The answer to the challenges facing the country, specifically the telecommunications market, is competition. Our basic point is that where there are competitive pressures, they are the one thing that will force private companies to act in the interests of customers. Local loop unbundling is a key element, although not the only one, in providing real competition in the critical last mile. We compete on voice services. While we sometimes use our own network, we frequently use the Eircom network. We believe the people need competitors in local exchanges and competitive offerings from their local exchange.
In the graphic we try to illustrate what we believe is a weakening of competitive activity in the market. At 80%, Eircom's market share has remained fairly static since 2000. That is not normal. ComReg may be able to make a contribution on the comparisons with other countries. Certainly, this is not our experience in the United Kingdom. In a truly competitive market the two lines tend to come together gradually over time. One would certainly be looking for a trend where they start to come together, although the pace may be different. The trend in Ireland is flat.
I will ask Mr. Evans to discuss the issue of local loop unbundling.
Mr. Evans
A key element in making the lines converge in the next few years will be a focus on local loop unbundling, the process whereby Eircom provides the local copper cable between the customer, whether business or residential, and the local exchange. It hands this over at a wholesale level to other operators which can then develop and build services to the customer independent of Eircom. This is recognised as the way to increase competition in the fixed line market.
We are doing this at 40 locations. To do so we received an EU subsidy under the national development plan. No other operator has purchased this. However, there are issues with regard to pricing and the process involved. As a result of what we have done, 0.15% of the available lines are now unbundled, the lowest figure in Europe. The price provided by Eircom is the second highest in Europe. As critical as pricing is the fact that the processes are all manual. There is no automation within the service delivery, ordering, billing or fault handling processes for local loop unbundling.
What does this mean for Ireland? The metropolitan area networks are good. While they will deliver competition in the districts where they are being installed, they will not get down to the local customer or small business. They do not get into their premises because the metropolitan area network is a high capacity fibre optic network. To get into premises the local piece from the exchange to the customer must be opened up. This would deliver consumer choice, bringing about lower prices and improved service levels. It would also mean that voice and data services would be fully integrated and real broadband services at two megabits and above would be available and could be provided by other operators, covering pay-as-you-go, telephony, unlimited packages, voice over broadband, voice over Internet protocol and video TV over broadband services, all of which would be available if there was competitive pressure at the local loop. This has already happened.
Some countries are slower than others but in places such as France and Germany the local loop has been and is being unbundled effectively by competing operators. There are now innovative and low cost offerings from other operators. We will continue to be left behind unless this issue is addressed. The Government can lead by example through open tendering of all Government fixed and voice and data services. As Mr. Connolly mentioned, Eircom has an exclusive fixed contract with the Government for all voice and data services. The regulator's hand needs to be strengthened to police and promote positive competitive activity in the industry. ComReg needs to be given the powers to do its job effectively.
To do what?
Mr. Evans
To promote competition. It should have the power to deliver effective sanctions and penalties where needed. To date, although it has found Eircom to be in breach of regulations in many cases, no penalties have been applied but Eircom has often brought ComReg to court. ComReg needs to be given the powers to do its job effectively.
For all operators.
Mr. Evans
Yes. Previous ministerial directives on flat rate Internet and telephone line rental charges have proved effective in the market. While these issues have been discussed for years within the regulatory environment and through consultation, no progress has been made. The previous Minister for Communications, Marine and Natural Resources stepped in twice. Flat rate Internet and competitive telephone line rental charges from other operators were achieved within six months of the Minister's action. Such a policy direction is now needed on local loop unbundling to generate competition and stimulate the marketplace. It is needed now, not in six months or a year's time.
The Government could encourage market stimulation. Mr. McRedmond referred to other operators entering the market. We will invest in our network where we are given a fair opportunity. We have already done so. We would like to do this through public private partnerships. In locations which are not economically viable PPPs can be successful over a long term. They have worked for the road network and bridges and could work for telecoms. This system works in the United Kingdom and there is no reason it cannot work here.
Broadband attracts a VAT rate of 21%. Broadband is a service like electricity supply and the VAT rate of 13.5% should apply. This would be in the interests of all operators and customers.
Esat will continue to invest heavily in its business, not just through the network but through people, systems and local loop unbundling, should the current issues be resolved. We will work in partnership with the Government. We have bid for the schools broadband project and will work through all-Ireland networking. BT Northern Ireland is a very successful operation north of the Border and we work very closely with it. We continually drive down price points and are recognised as the aggressor which has driven down prices in the marketplace. As our costs are driven down through a reduction in wholesale charges, we pass the reductions on to our customers and will continue to do so. However, we cannot control or affect Eircom's input wholesale prices. That is a matter for ComReg. We will continue to develop innovative and new products and assist in the awareness of broadband through advertising, events sponsorship, partnerships and so on.
I thank the delegates for coming before the committee and giving of their time. I apologise for the delay. It took a while to deal with the previous delegation.
The quality of mobile telephone services in Ireland is appalling. I do not know what needs to be done but I have complained about the matter on many occasions. The service is expensive and haphazard. A person who requires an around the clock service needs at least three separate lines. In some places two are sufficient but in others three are needed to give continued service in order that when one breaks down the other can pick up. Calls break down with incredible frequency on all services, including BT. No operator is perfect. If such a service was being delivered by anyone else to a wide group of customers, there would be mayhem.
I had one of the first mobile phones in the country and was the first Member of the Oireachtas to have a car phone. The service has not kept pace with modern technology. I am sure the delegation will say there is difficulty getting base stations, masts and so on. Nevertheless, the quality of the service to domestic and business customers leaves much to be desired. I do not know how the wireless system will work if the mobile phone system is so haphazard.
I presume the broadband three month no strings attached trial is progressing satisfactorily. How effective has it been? Does Esat take part in all telephone social welfare allowance schemes such as free line rental and free calls? Some operators did not take part in the schemes originally but are now doing so. Did Esat take part in them from the beginning or only in the last couple of weeks? We all received telephone calls from our friend in Rathmore, County Kerry.
I accept what has been said about ComReg's role in competition on line rental charges. The quality and availability of broadband in the North of Ireland are considerably ahead. Will Mr. Evans comment on this? We should have reached a conclusion to a high degree in regard to local loop unbundling as the problem has been ongoing for several years. Mr. Evans might elucidate further on this.
Mr. Evans
To clarify the question on the mobile network, my company, Esat BT, is a fixed line operator only. I know it had a mobile brand within the marketplace but it de-merged the O business two or three years ago. This question might be held for the mobile operators.
Representatives of the mobile operators will appear before the committee on 23 November.
Is there not some use of the fixed line system?
Mr. Evans
We are effectively a fixed line operator. The reference to wireless stations was to wireless data for businesses.
That is fine.
Mr. Evans
The three months free trial has probably been the reason take up of broadband has rocketed in recent months.
Does Mr. Evans have figures for this?
Mr. Evans
I do. Some 85% of customers signing up for the free trial will stay with the service at the end of the trial period. As an example, it is similar to watching colour television, having experienced black and white television. There is huge misconception about broadband. People do not know what they want it for or whether it is worth paying for. However, when they are offered a free trial with no strings attached, they sign up, experience it for three months and, in the main, do stay with the service.
What is Esat BT's definition of broadband?
Mr. Evans
The generally accepted definition within Esat BT is 512 kilobits per second and above. This is also the Ofcom definition in the United Kingdom. The number of our customers multiplied by six following the beginning of the trial which will run until the end of the year. With regard to Mr. McRedmond's figures of between 600 and 900 customers per day, approximately 20% to 25% — between 100 and 200 per day on average — are for Esat BT-Ireland Online reselling the Eircom product. This is in contrast to the position in the United Kingdom where less than 50% of the lines BT is putting in are for its own use while more than 50% are being used by other operators reselling the product within the marketplace. Does this answer the question on the three month trial?
Yes.
Mr. Evans
Mr. Connolly will answer the question relating to the Department of Social and Family Affairs.
The question is related to how long Esat BT has been involved in the telephone allowance scheme. Esat BT only became relevant with the introduction of wholesale line rental charges and, therefore, the single bill. The single bill process involved Esat BT charging the line rental charges in respect of which telephone allowance recipients receive a subsidy from the Department. The challenge for us was to support this.
Eircom charges a little more than the Department's subsidy and for this charge does not charge line rental charges, delivers a free handset service, if the customer has a handset, and a little over €1 in free usage. When Esat BT considered this, we recognised that many homes did not have rented handsets and considered it would be better to simply provide a €5 free call allowance. In addition, we charge the package at exactly the amount of the subsidy. Therefore, if the telephone allowance recipient is on holiday or not using his or her telephone line, his or her bill will be zero as the telephone allowance will pay the cost of the charge. The retail value of the benefits we deliver is, as one would expect, higher than with the Eircom package. Moreover, we have taken the handset out of the package because 50% or more of households do not have rented handsets.
The slide being viewed by the committee illustrates the package. The Department of Social and Family Affairs telephone allowance is the same for Eircom and Esat BT. However, the Eircom package is somewhat higher in cost while the value of the Esat BT package is higher than Eircom's. A further slide shows the breakdown of the package which recognises that many do not have a rented handset. Therefore, the package simply provides the full value in call credit. The purpose in stating this is not to tell the committee how great we are but simply that we try to take a simple approach to pricing products.
Mr. Evans
While Mr. McRedmond of Eircom quoted a rate of 6% as the penetration rate for broadband in the Republic of Ireland, the rate is approximately 9%, or 50% higher, for Northern Ireland. Critically, by the end of 2005 100% of the area and people of Northern Ireland will be covered by broadband, an initiative introduced by Esat BT.
When did Esat BT first have a customer experience of modem hijacking? What is its policy on refundings? When did it set this policy?
Some critics state Esat BT talks the talk but does not necessarily walk the walk and that it is easy to cherry-pick and invest in commercial sectors. While Esat BT talks about wanting to quote for the Government contract, perhaps it is not putting its heart and soul into making the necessary investment to challenge the other main company. We heard of the level of investment Eircom is making in its access infrastructure. Given the significant resources of the parent company, BT, what level of investment is Esat BT making in its access infrastructure each year?
As Mr. McRedmond observed, modem hijacking is an Internet phenomenon. It became an issue for Esat BT, its customers and others at the same time. I became aware of it in the past 12 months and can remember the first e-mail I received on the subject.
Our policy has been to credit our customers, although this is not universal. If a customer has not alerted us to these charges, we will come to an agreement with him or her. However, we have never cut off a customer because he or she did not pay them. It is possible, as Mr. McRedmond stated, for a customer to deliberately and knowingly incur these charges which are generally incurred in payment for service. However, as the word "hijacking" implies, it is more common for it to be done unknowingly. It is a tricky one to catch and hard to be proactive because premium numbers are not being dialled. Instead, these are standard international direct dial, IDD, international country code calls to specific destinations, typically small island nations that have been co-opted into this practice and which impose a disproportionately high cost for calling their countries because they share the revenue with the service providers.
How can Esat BT tell whether it is witting or unwitting?
We cannot.
Therefore, the company can only have a policy of crediting customers.
Our policy is to bar access to these destinations.
Mr. Evans
ComReg issued a paper on the matter which we implemented in full. Our customers can no longer call these destinations unless they specifically request a telephone number in the case of a legitimate business. I am not aware of any modem hijacking within the marketplace prior to this. We have approximately a 6% market share of the residential voice market. If Eircom has X number, we will divide that number by 16. Any issues we had would have been very minor because it would have come to my attention if the amounts had been large. There is a system in place in our network that can flag out-of-pattern calls, to certain numbers and destinations, but it is difficult to determine whether this is legitimate. In the vast majority of cases we take the word of our customers. It is highly unlikely that we would become involved in a dispute with a customer and have not done so to date.
On the question of cherry-picking, as I said, we are a full service provider. Therefore, we do not operate in the corporate market only. We operate right across the board, including the residential market. Our level of capital investment last year was approximately 15% of revenue, which is higher than that of Eircom but that is to be expected because we have lower revenue.
What is the figure for revenue?
Mr. Evans
Revenue last year amounted to approximately €300 million.
Which gives a figure of approximately €40 million or €50 million.
Mr. Evans
Yes.
How much of this was invested in the company's access network?
Mr. Evans
We have built our core backbone network. This mainly involves providing broadband bay stations to deliver wireless and network connectivity to customers.
Mainly wireless.
Mr. Evans
No. There are fixed access points to Eircom exchanges used at network level.
On public private partnerships, has the company developed a template for this development?
Mr. Evans
The templates with which we have worked in Great Britain and Northern Ireland centre on the areas where the government finds it difficult to get people to invest, either because of the size of the market or the types of customer at that location. It is similar to the road network where the Government works with the industry, not just Esat, but Eircom or any other operator which wants to get involved. The costs are shared over a long period in providing broadband. There have been approximately 50 such initiatives in the UK and they have been extremely successful. We believe this model will work in the Republic of Ireland marketplace.
What is the return to investors in the United Kingdom?
Mr. Evans
I am not aware of the numbers but can get them for the Deputy.
It appears Mr. Evans is critical of ComReg in that customers have limited choice in terms of fixed line access, Eircom controls wholesale and retail prices and only 2,500 local loop lines, representing 0.15% of available lines, have been unbundled to date. Is he saying ComReg is not doing its job?
Mr. Evans
No, I am saying that up until now ComReg has done as good a job as is possible within the environment in which it is working but it needs to be given the autonomy to get things working.
Is Mr. Evans saying customers pay more because there is still a monopoly in certain areas?
Mr. Evans
Yes.
Timescale is a major factor. Does the monopoly impact on the rates customers must pay for services? What has caused the delay?
Mr. Evans
It has been shown that where ComReg has set the agenda around competitive provision of services, customers have benefited, from a price perspective in particular. For example, in some areas it has proved difficult for ComReg to have competitive services delivered. It has taken a number of years to have line rental charges included in the market. As a result, we are beginning to see competition. Things have happened where a direction has been given by the Minister. This is needed in the case of local loop unbundling.
Has Esat BT carried out an evaluation of the quality of the lines owned by Eircom? Will the technology be replaced?
Mr. Evans
If we are selling a broadband service to our customers and reselling the Eircom product, between seven and eight out of ten lines in DSL enabled exchanges can be provided with a service. Mr. McRedmond quoted similar figures. Between 70% and 80% of lines are in DSL enabled exchanges. This means that broadband is available in approximately 60% of the country.
Given the difficulties, what hope is there of making a service available to the remaining 30%?
Mr. Evans
With local loop unbundling, with other operators we can access the local exchange. We will be offering a different product from the wholesale product provided by Eircom. This will allow some customers to avail of broadband services. Wireless operators can deliver broadband to some customers in local areas. Satellite probably provides the last option available everywhere. A number of operators offer such services.
Does Mr. Evans agree people are confused by the jargon used such as broadband, unbundling the loop and so on? Those who require a service find the politics involved difficult to understand, given that so many operators are competing for business, yet they are not in a position to provide a service.
Mr. Evans
I agree with the Deputy that there is a lot of jargon involved. Unbundling the local loop is an issue we are pushing with ComReg, Eircom and the Government but customers do not need to be aware of it. Many companies are marketing broadband to consumers, whether it be wireless, satellite or DSL services. As it is confusing, the industry needs to get together and make the position clearer.
Does Mr. Evans agree that all the partners involved in this important infrastructural development should set up a facility to turn this into a marketable and accessible product which could be easily explained to customers?
Mr. Evans
I agree with the Deputy.
We heard that Eircom had a difficulty in accessing certain estates. Is Esat investing in the access network, thus providing poles and lines in new housing estates? Is it investing in fibre optic cable, wireless and satellite services to businesses and so on? Is it providing access for individual houses in estates?
Mr. Evans
Our investment is predominantly in the access network into businesses.
None at the domestic level.
Mr. Evans
There is a network in place for consumers, in the vast majority of cases, which was paid for by the taxpayer dozens of years ago. There would be no point in building a completely parallel network because it would cost billions to do so. The trick is to open the existing network. That is what happens in every other country.
Is it not possible to link the MANS with that network?
Mr. Evans
Yes. We are using the MANS today. We are one of the only operators——
Going from the MANS to the householder, Esat BT cannot go direct. It has to go through the Eircom——
Mr. Evans
Nobody can cost-effectively go through the MANS to the householder. The route to customers is through the MANS into the exchange, through the local loop and into the household. No one will go directly from the MANS into a customer's home. It is either through the local loop via the exchange or through wireless and into the customer's house. Nobody could obtain a return on building a complete parallel network.
Esat BT had a problem in overcharging customers this year. Was that its only problem or were there others?
Mr. Evans
There was one issue, in particular. As Mr. McRedmond stated, billing systems are complex and issues will always arise. When we and other operators recognise such issues, we contact customers, explain the situation and, at the least, issue refunds, if not additional compensation.
Did customers inform Esat BT about the overbilling?
Mr. Evans
The case in question was notified through ComReg. Our billing system was rounding up VAT on one of our products. We round up any figures above half a cent and round down to zero any below. We had a product we were marketing at €29.99 per month, while customers were being billed at €30 per month. Overcharging was, therefore, at a rate of one cent per month and the total figure amounted to approximately €300. These are extremely small amounts but the principle was not correct. We addressed this and made the changes. We are still marketing the product at €29.99 but the bill to the customer is €29.98. In addition, we credited all of our customers.
Has Esat BT been asked to tender for Government business or has it been excluded from doing so?
Mr. Evans
No. The tender for Government business was issued approximately four years ago. Three or four operators bid for that business. It was a combined tender and one had to secure all the business together. In reality, only one operator could deliver the complete service. Our belief is there will be a further tendering process in the coming year or two.
Does Esat BT intend to submit a tender?
Mr. Evans
Most definitely.
Does Esat BT have any difficulties with the incumbent in terms of the first mile being made available in the event of its taking over lines? Are there any problems with exchanges? Is Esat BT obtaining full co-operation from Eircom?
Mr. Evans
I wish to make one point. We have an extremely good and healthy relationship with Eircom at a wholesale level. We are extremely aggressive and compete strongly with it and vice versa. It is healthy competition.
Therefore, there are no difficulties or delays.
Mr. Evans
We run into business issues every day of the week.
There is no deliberate——
Mr. Evans
Eircom is not doing anything that runs contrary to the principles, rules and regulations laid down.
I apologise for missing the presentation. I was obliged to attend another meeting. However, I have read it and wish to raise a point. It is stated fewer than 2,500 lines have been unbundled and that this represents 0.15% of available lines, the lowest figure in Europe. That is extraordinary and appears to contradict what Mr. McRedmond said.
Mr. Evans
There are two key differences. Unbundling is the process whereby another operator can take the bare copper cable from the exchange into the customer and deliver its own services directly from it. Eircom is providing its own DSL service and reselling it to other operators. That is the predominant way in which DSL is delivered today. We believe unbundling is the way to move to the next level and deliver better services, at lower cost, to the customer. The price was so high to deliver services from the 40 exchanges from which DSL had been rolled out that it could not have been done without funding under the national development plan because we would not have had a business case for doing so. If we had not obtained the funding, 0% of lines would have been unbundled to date. The figure for unbundling has remained static for the past 12 to 18 months. It is extraordinary and we would like to do more. If we get the process right, we will do more.
It remains the case that it is incredibly difficult to gain access to exchanges.
Mr. Evans
Yes.
In respect of VAT rates and the Supreme Court judgment to which I referred, what rate of VAT does Esat BT charge?
Mr. Evans
We charge 21% VAT for all our services.
Has the company taken advice on the Supreme Court judgment?
Mr. Evans
The ruling was issued by the Supreme Court to NTL. We are awaiting clarification from the Revenue Commissioners as to whether it will apply to telecommunications companies. We effectively pass on the VAT. Therefore, our prices will fall overnight if——
Will Esat BT refund VAT to customers who are not VAT registered?
Mr. Evans
If Revenue's decision is that it is to be backdated 12 months, we will refund any VAT paid to our customers.
How long has Esat BT been dealing with the Revenue Commissioners in respect of this matter?
Mr. Evans
Only since the press article involving NTL was published. We were not directly involved in the court case.
I am aware of that.
Mr. Evans
We submitted our queries approximately six months ago.
I thank Mr. Connolly and Mr. Evans for appearing before the committee at such short notice. I wish their company every success in the future.
We will now hear from Mr. John Doherty and Ms Isolde Goggin of ComReg who are accompanied by Mr. Bobby Hannan and Mr. Mike Byrne. They are all welcome. I apologise for the delay in today's proceedings.
I remind our guests that the comments of members of the committee enjoy absolute privilege but that this does not extend to witnesses appearing before it. The committee cannot guarantee any level of privilege to witnesses appearing before it. Furthermore, under the salient rulings of the Chair, members are reminded that they should not comment on, criticise or make charges against any person outside the House, or an official, either by name or in such a way as to make him or her identifiable.
We will first take our guests' presentation before proceeding to questions from members. The latter should be cognisant of the salient rulings of the Chair regarding accusations, etc.
Mr. John Doherty
I thank the Chairman for the invitation to attend these proceedings. I will first introduce my colleagues and outline their roles. I am accompanied by my fellow commissioner, Ms Isolde Goggin, our director of market operations, Mr. Mike Byrne, and our manager of consumer affairs, Mr. Bobby Hannan.
I am conscious of the time constraints. It is, therefore, my intention to run quickly through the presentation and possibly deal with questions in a constructive fashion. I will begin by giving a brief update on the telecommunications sector and then proceed to outline some consumer initiatives we began in 2004, indicate what we have done on the overbilling issues, outline what we have done in terms of promoting innovation and, finally, provide a summary.
The market here remains at approximately 3.5% of GNP which is significantly higher than in other markets. However, the pace of growth is beginning to slow.
With regard to prices, the index of telecommunications costs in Ireland, using an index of 100, fell 19 points between 1997 and September 2004. I often hear that telecommunications and other sectors are not competitive but Ireland's telecommunications sector is competitive. The market, post-liberalisation, has produced a sector that provides competitive prices.
The next slide highlights that Ireland is in ninth place in the residential market, taking a full basket of services, including line rental, call costs and other elements. It is sixth cheapest in Europe in the business market. Few utilities have such characteristics.
I refer to leased lines. Committee members have raised questions about businesses using Ireland as a location for foreign direct investment. Ireland is the fourth cheapest in Europe for national leased lines, a key element for FDI. Microsoft located its new SM project here this week while Bell Laboratories has established its only presence outside the United States here. Such companies are heavily dependent on the quality and service of leased lines. We are the cheapest in Europe in international leased lines.
DSL take-up has reached 91,000 and average take-up is 10,000 per month. We would like to see more but given the current trajectory, our projection is that the figure will be 115,000 by the end of December. However, a number of elements must be considered to maintain the upward trajectory, one of which is PC penetration in the marketplace at 46% which must improve. For example, the penetration rate in the United States is between 10% and 15% higher. This is one of the barriers to increasing DSL take-up. Equally, between 700,000 and 800,000 lines are open to customers to take up, yet only 100,000 have been taken up. There are supply issues but demand initiatives are also needed in order that people understand what broadband means. I deal with many small businesses as well as the large corporate segment and many still do not understand broadband. Demand initiatives must be accentuated in addition to supply initiatives to maintain growth.
I was a little surprised at comments on competition. More than 35 operators provide a range of products and services in the market. Three new operators entered the market in the past year, one of which finds it sufficiently attractive to invest €1 million in advertising. That is not indicative of a market closed to competition. The graph which is based on revenue, not market share or customer numbers, shows revenue remaining at 80% but this can vary. Following 19 years of liberalisation in the UK market, BT retains a 70% market share. There is a significant number of operators in the market and new operators are entering. Many members will have seen the amusing advertisements run by Tele2, in particular, which has introduced new action lines. There are infrastructural players and resellers in the market. There are as many, if not more, than in any other European market.
CPS growth figures on the volume line have increased significantly quarter on quarter. ComReg is probably the only national regulatory authority which has intervened as often in CPS. We are the only NRA which has provided for a no win back period for three months. I am surprised, therefore, at the comments on enforcement issues.
I refer to single billing wholesale line rental charges. ComReg did significant work writing the process manuals in this area because one of the challenges in this market is that the incumbent has 7,000 employees while most of the other operators have limited resources and are competing for capital expenditure often on an international basis. ComReg has tried to infill the deficit in knowledge and experience by writing much of the process elements to support wholesale line rental. We are probably the only NRA in Europe which has undertaken this activity. However, this figure is approaching 50,000 and I expect it will exceed 60,000, which will be a considerable success. Credit should be given to Smart Telecom which initiated this service and has garnered approximately 50% of the market. It is interesting in the context of local loop unbundling that this company is unbundling 64 local exchanges. Its target is to unbundle 30 in the next quarter. We are working aggressively with it. It is using wireless applications to provide the local access element as a solution. The company offers calls between its customers free of charge. Such an innovation is taking place in the market and we are happy to be associated with it.
Ms Isolde Goggin
I apologise for the loss of slides but will push ahead rather that wait for a technological solution. The slide headed ComReg — Ongoing Activities highlights a new consumer website, www.askcomreg.ie, which was launched last month by the Minister for Communications, Marine and Natural Resources as his first official duty having taken up his new portfolio. We have our normal website, on which we publish consultation documents, decisions, formats for applying for licences and so on but that is a “techies” website. It is aimed at people in the industry who want information from us and who are directly affected by our decisions rather than consumers. We thought it would be useful to launch a consumer website which would give consumers an opportunity to get answers to their questions in plain English and avoid the technical jargon as much as possible.
With regard to other ongoing activities, Mr. Doherty mentioned the launch of single billing in June. The idea behind this is that the issuing of two bills to consumers was a barrier to competition. Consumers received a bill from Eircom for line rental and another from their operator for calls. That was not clear to many consumers when they signed up to new operators. We introduced the wholesale line rental single billing product for this reason. Consumers receive one bill which covers line rental and calls and do not suffer the inconvenience of paying twice.
We issued a decision on pricing information for the directory inquiries service. We received many complaints that when consumers asked for a call to be put through, they were told the call would be charged at a higher rate. We have put a stop to this.
We issue consumer guides on a range of issues, including pricing, consumer choice, the auto diallers issue, single billing and directory inquiries service. We have decided to develop an interactive pricing website in response to consumer confusion engendered by the plethora of pricing offers and the different billing formats offered by operators — some offer different billing methods, X minutes at a flat rate and different prices for various types of calls. A consumer using the proposed website could enter his or her details, a scan of operators would be conducted and he or she would be informed which one was best for him or her.
The auto diallers issue was discussed. We became aware of this in April following numerous consumer complaints. We issued a consumer guide to warn of problems and provide advice. We subsequently issued a direction to Internet service providers and telephone companies to take specific measures to protect consumers. They could block all these calls and only release the numbers when it was clear they were legitimate or they would have to take the hit and pay the costs of consumers who had been scammed.
Did ComReg issue the instruction to the service providers?
Ms Goggin
Yes.
Mr. McRedmond stated that as soon as it was discovered, Eircom started paying the money back. If ComReg was obliged to go to the different service providers, there is something wrong.
Ms Goggin
We issued a formal direction. We issued the consumer guide in April to make people aware of this matter. Some of the operators started to take certain steps but we felt they had not gone far enough. For example, they would wait for a certain period and if they then noticed an abnormality, they would alert the customer. However, it could be too late at that stage. We were receiving complaints from consumers who had been billed for a figure up to €12,000.
Mr. Doherty
We had received over 300 complaints. At that point it was not apparent that the industry was doing what needed to be done. We were receiving an increasing number of complaints and, when it exceeded 300, issued the direction.
Ms Goggin
As regards the safety issue that arose with NTL in south-west Dublin and the boxes it had placed on people's walls, we stepped in immediately and required the company to assist consumers to move to new operators and, as it is obliged to do, meet the direct costs involved. We also obliged it to facilitate call forwarding while the new lines were being organised. The idea was to minimise the level of inconvenience to customers in order to ensure they remained connected and that they could transit to a new operator with the minimum of disruption and at no cost to them.
During the summer a number of overbilling issues arose in respect of different operators. In all of these, our primary concern was to step in to protect all the affected customers. We ensured all the accounts were corrected immediately. We secured not only reimbursement of the amounts overbilled but also inconvenience credits for those customers whose accounts had been debited. We required each company to provide us with a report on the incidents of overbilling and the remedial action that had been taken.
We took immediate steps when the issues arose and required independent third party reviews of the billing systems, where appropriate. This was to ensure that not only would the companies assure us that their houses had been put in order——
Did one of the Deputies raise a question about independent verification?
I inquired whether, where a company does a look-back on overbilling, overcharging or misbehaviour, ComReg would carry out an independent audit or employ a consultant to examine the position.
Many members of the public would have been of the opinion that much more stringent sanctions should have been imposed by ComReg on NTL, particularly in the light of the unilateral way in which that company behaved, not only in respect of its own customers in the Tallaght area but also in respect of ComReg. NTL's behaviour was disgraceful. What sanctions were imposed? The Chairman and other members referred to Eircom overbilling. What sanctions are being imposed? ComReg always seems to be reacting after the horse has bolted. What will happen to NTL, Eircom or any other operator which treats customers in a cavalier way?
I was delighted to be present at ComReg's recent conference on serving the e-consumer at the Royal Hospital. I was not able to be present for the entire conference but the documents issued were extremely helpful and could perhaps be considered by the committee. One of these referred to the Danish experience vis-à-vis transparency in billing. I commend ComReg on the initiative it took in this area. Members represent consumers and constituents on a daily basis in respect of overbilling and similar issues and it appears ComReg lacks teeth.
Ms Goggin should conclude her presentation.
Ms Goggin
Will I return to the Deputy's point at the end?
Yes.
Ms Goggin
As regards overbilling issues, the needs of the consumer are paramount. Our main objective has always been to resolve consumer issues and obtain redress for consumers. We continue to monitor the performance of the authorised companies. We have written to each of them and required them to give commitments that their billing systems are in order. We now have a standardised approach should any further incidents occur.
On billing and tariffs, we received responses from the companies confirming that full reviews had been undertaken. We have issued a code of practice for tariff presentation to address the point of customer confusion regarding the plethora of billing schemes in existence and to enable clear and accessible pricing. We have taken a stance in the public arena and highlighted the issues involved. We have consulted on a proposal to amend the general authorisation to require a condition to ensure accuracy and reliability of billing systems. That is one aspect of the enforcement issue, to which we will return.
In terms of promoting innovation, listening to the earlier debate with Eircom and Esat BT we would be concerned that so much focus is being placed on DSL or digital subscriber lines where the existing Eircom line is transformed into a digital line and broadband is thus created. That is a hugely important way of giving consumers access to broadband but it is not the only way. Part of our mandate is to promote competition. We do not want to find ourselves in a situation as happens in the case of fixed lines where there is a natural monopoly on the last mile. There are other alternatives available in the broadband era. For example, there are fixed wireless alternatives, satellite and other measures that can be put in place.
The committee is also of that view, as Ms Goggin will know from its report.
Ms Goggin
Absolutely. We have issued a number of licences for fixed wireless access. The idea behind them is that they are local in nature. Rather than having a big national licence which is a high barrier to entry — only a small number of companies would have the resources to invest and build a national network — we have made it available to smaller companies which can obtain a licence for their local area and provide services in this way. We have issued a consultation paper on making further spectrum available for mobile broadband access. All of our 3G licences have been launched and we are continuing the roll-out of the network.
We also consulted and received useful responses from industry and Forfás on the idea of freeing our test licensing system. This is the idea that companies can ask for spectrum for test purposes for a certain period in respect of a limited number of users. We are using this as a test bed to try to capitalise on the fact that companies such as Motorola, Eriksson, etc., are involved in the radio and wireless business in Ireland and that we have spectrum available which people should be able to use. This would make the country attractive for international research. We received some very good responses on the matter.
We recently issued a decision on voice over IP, VoIP or voice over Internet protocol. The idea was to try to maximise availability in order to make it as easy as possible for new service companies to enter the market, get services up and running and then roll them out. The consultation, in the immediate sense, was about making numbers available for the national numbering scheme in order that they could obtain access to such numbers and be perceived as services to compete with any others. This has just been completed and made available. There has been an amount of interest from new service providers in entering the market.
Will licences be issued under the VoIP?
Ms Goggin
It is a general authorisation. We are not obliged to make a formal decision. All interested parties need do is provide their name, address and contact details and outline the services they are offering. It is a general authorisation scheme.
Mr. Doherty
We are, therefore, open for business. It is, in a sense, dependent on companies taking up the offer.
Is Sir Anthony O'Reilly interested in buying a licence and rolling out a network? Has he been in communication with ComReg?
Mr. Doherty
Is the Chairman referring to a mobile licence?
Yes.
Mr. Doherty
These are matters for Eircom. I understand the company is on record as stating there are a number of options it is continuing to consider.
We are meeting the mobile phone companies in two weeks' time in respect of billing. Perhaps we might invite our guests from ComReg to come before us again in respect of a number of matters. If these networks have built their own systems, should somebody be able to come in and buy wholesale minutes without the expense of rolling out its own network or purchasing a licence? Is that not unfair?
Mr. Doherty
That would have a major resonance with Eircom because it is required by regulation, as the SNP operator, to provide open access at competitive rates. We cannot prejudge the outcome of the mobile phone issue. We published our consultation document and are considering the options. However, Eircom is forced by regulation to provide access for all authorised companies at competitive prices.
For fixed lines.
Mr. Doherty
Yes.
Eircom sold its mobile phone licence. I am trying to grasp this issue before the mobile phone delegations appear. Can an individual operate this system without a network and licence?
Mr. Doherty
I refer to the fixed line example again. There are 20 or 30 companies, called resellers, which resell minutes on the networks of Eircom, Esat BT or MCI. We have produced an extensive consultation paper on mobile phone issues. Perhaps it would be helpful if I forwarded an executive summary to the committee. It might help to tease out the issues involved.
That might be helpful.
What does the commission think is a fair price for virtual network operators?
Mr. Doherty
We are still considering the response to consultation on mobile phone access and the call origination paper. Therefore, we are not a position at this stage to say because we are still considering the information we received in response.
I welcome the ComReg delegation which gave us an informative and wide ranging presentation. I welcome the stream of information and emails we receive from the commission which are helpful to us in our work.
Mr. Doherty stated there were 35 operators in the market and referred to the Smart Telecom offer of free calls within the network. Why has ComReg described Eircom as having significant market power in one of the papers it sent to the committee? Vodafone and O are also described in a similar way. What percentage of the fixed line market do Eircom and Esat BT have? To what extent do Vodafone and O dominate the mobile phone market? ComReg states the market is competitive, yet it also states certain companies have significant market power. How does this add up?
The presentation concluded there was a need for more enforcement. Deputy Durkan recently referred to the upcoming telecommunications Bill, on which, presumably, there will be hearings, particularly regarding enhancing the powers and resources of ComReg. I refer to NTL's recent announcement about its telephone service because it is the freshest example in our minds. ComReg immediately outlined what the company should do but the consumers in Tallaght who contacted my office were upset and frightened about what had happened to them. It was an extraordinary announcement by the company because the consumers in question thought the telephones would blow up or go on fire and that their houses were in danger. They were left in limbo.
My party leader who represents the area frantically tried to find out over the weekend in question what was happening in NTL but he got nowhere. The company would not come clean and talk to him. ComReg stated the company should have done X, Y and Z but NTL stated as soon as it realised the problem, it informed customers because the matter was urgent. The company also told them to use another operator. It is extraordinary that a company could behave this way towards its customers. A serious sanction should be imposed for such behaviour, whether it be a fine or other suitable punishment. Similar sanctions should be imposed for overcharging. Does ComReg not have adequate powers? Does it need to be beefed up similar to Ofcom in the United Kingdom?
Ms Goggin
Most of the issues have been covered. Competition in the marketplace has increased and new operators have entered.
On the issue of significant market power, there is a distinction between wholesale and retail operators. Wholesale involves inter-operator transactions. This is dependent on Eircom's network for the last mile between the consumer and the exchange and to carry traffic between one exchange and another. Some new entrants have built their own networks. Esat BT built its network as close as it could to the consumer to interconnect with Eircom's system over the last mile but other entrants are reselling minutes from other operators. The reason there is competition at the retail level is there is SNP at the wholesale level and requirements have been imposed to provide access at that level. Even at the retail level, we still have a requirement to impose obligations on Eircom in regard to a price cap and so on.
Broadband provision started slowly but is increasing quickly. The annualised growth rate is 460%. It is mostly DSL but we place a great deal of emphasis on competition in fixed wireless and cable, on which Ireland missed the boat, unfortunately, because of the timing of the dotcom boom. However, the numbers are creeping upwards with cable services being provided by Chorus and others.
A range of measures have been taken since we last appeared before the committee to inform and protect consumers. We take a strong approach. An informed consumer is the best safeguard of competition because he or she will choose the best for himself or herself.
We took immediate action in response to the overcharging by telecommunications companies. We have systems in place which can minimise the likelihood of it happening again. While it cannot be eliminated, it can be minimised. We will continue to promote innovation to try to find ways of pushing the boat out to get around the last mile by bringing in new technologies and services such as wireless and voice over IP. We need enhanced enforcement powers.
Mr. Doherty
I refer to Deputy Broughan's final question. NTL could have handled the situation better. Our intention is to try to protect the consumer. We moved rapidly and set out the guidelines. We need further enforcement powers. I am led to understand the miscellaneous provisions Bill may provide the backdrop for their provision. The new regulation issued after the transposition of the communications Bill in 2002 meant we no longer had the powers provided under it. They are needed as a deterrent to avoid these issues being repeated. We have acted promptly and expeditiously in looking after consumers in every case. Some of the companies could have communicated better but that is an evolving process. We are constantly pushing about what we see as the standard process.
According to our original access paper, the Vodafone-O market share in the mobile phone sector was 94%. The market share of Esat BT and other companies in other sectors of the market, particularly the corporate market, may be 50% or less. We have determined in our market analysis, for example, that, in respect of internationally leased lines and leased lines over two megs in size, the market here is effectively competitive and Eircom is not dominant. What I am trying to demonstrate is that it varies in terms of the segment of the market in which one is operating. If one is a large corporate client, one has NCI, COLT, Cable and Wireless, Esat and other operators. In other parts of the market there may be different or fewer players. That is part of the market analysis at which we are looking.
They do not get the benefit of competition to the same extent.
Mr. Doherty
They can do so. For example, one can obtain 20 or 30 offers on one's voice traffic, so-called CPS product. Companies can offer one bundle products and services. Companies such as Access Telecom or Gaelic Telecom are offering 15% discounts on line rental cost as part of the bundle. Esat BT has competitively pioneered bundle products and services in this market. There is also the Smart Telecom offer we discussed. There is a significant range available. Part of what we are trying to do is to bring a degree of predictability and transparency into play. However, there is a range of products and services available in the market.
Is the competition evenly spread? For example, I suspect there is a greater concentration of competition where the market is more lucrative. I am informed that it is not so concentrated where the market is not as lucrative.
Is ComReg satisfied with the current rate of speed in the provision of broadband? I understand there is an annualised increase of 460%. However, such a figure can be very misleading, particularly when one considers the baseline from whence provision began. If the baseline was zero, 460% would be very little. The information I have received is that the roll-out has been disappointing and could be a great deal better. I am sure ComReg has identified some contributory factors in this regard. If so, will our guests outline what they are?
The representatives of ComReg will have heard my tirade about mobile phone services in general. That was meant for everybody and I do not wish to repeat it. Perhaps our guests will address it in terms of how they can encourage improvement.
My final point relates to what Deputy Broughan said about NTL and the discontinuation of services in a particular area. Members of the House are supposed to be able to obtain information quickly. However, that was one of the cases in respect of which we were unable to obtain information. Even the information provided by way of reply to a priority question in the House was minimal, particularly in identifying the nature of the cause or causes of the problem or indicating who held responsibility. I accept that ComReg has a difficult job to do. However, delivery of services to consumers is of ultimate importance. Consumers relate their experiences of disappointment regarding a plethora of services on a daily basis. In this area, particularly in the light of the existence of modern, high technological advances, there should not be a problem. We need to know the real reason behind the difficulties involving NTL. We have not received satisfactory answers in respect of that matter.
Is there a protocol a company should follow if it wants to exit a market? Are there such protocols or has ComReg given any consideration to putting them in place?
Mr. Doherty
I will deal with some of the points raised and my colleague will deal with the others.
In respect of the exit strategy, there is in place a protocol which has been operated on several occasions. A number of operators have come into or left the market or changed hands and people have wanted to move as a result. The existing protocol has been used in several instances. Our main interest is protecting the consumer. If a company was to fail, we would be seeking as smooth a transition as possible from provider A to an alternative provider. These processes are in place. We generally receive notification in advance and try to work with the companies on either side to ensure this actually happens.
On NTL and the general situation, it is our view companies should be up-front, clear and transparent about what needs to be done. We constantly make this point to the various companies involved. There is a general acceptance on the part of the industry that this is what needs to be done. Rather than revisiting the NTL issue, I must state our general perspective is that companies must be up-front in their dealings. If there is overbilling or an issue of safety, companies should notify customers. There should be a clear process in place in that regard. The process to which I refer should include advertisements in newspapers and a dedicated freefone service which should provide information for the parties involved to enable them to understand how they should move to the next point.
Does ComReg have the power to put that protocol in place?
Mr. Doherty
We use the power of the court of public opinion to try to ensure those powers are fully in place. Part of what we are seeking is additional enforcement powers.
The committee takes a poor view of the way NTL treated public representatives, particularly the leader of the Labour Party, Deputy Rabbitte. As our schedule does not allow representatives of NTL to appear before the committee before the end of the year, perhaps Mr. Doherty will convey to the company that the committee is extremely annoyed at the way public representatives were treated.
Mr. Doherty
We will do so.
Deputy Durkan referred to the 460% take-up of broadband. Eircom will not provide all of the solutions in respect of broadband in the marketplace. We need multi-platform competition. The remainder of the industry must also compete in products and services. There is no doubt, however, that Eircom has a significant role to play. I stated previously that we had entered the market late. However, our trajectory is as good as any market in Europe.
Some members may be aware of my background in IDA Ireland. In that context, there is a serious issue in terms of the way Ireland is portrayed. Mr. Evans referred to a figure of 9% in Northern Ireland. The overall UK figure for penetration is 7.5% while the figure for Germany is less than 7%. I accept that there is more to be done. There are many who still do not understand broadband. More needs to be done to mentor and educate small businesses and use people's experiences as examples to those involved in the area. Equally, more needs to be done in respect of the residential market. Many of those to whom I speak are aware of broadband but, as it says in the advertisement, they just do not get it. The committee compiled an excellent report on the broadband strategy. However, there needs to be an element of how one can stimulate demand and raise awareness. There are approximately 800,000 lines but so far only 100,000 have been connected. In addition, there will be people who will not be able to be connected to the network by means of DSL. Therefore, we must consider alternative ways of proceeding.
In conjunction with Eircom, we are looking at so-called fibre to the cabinet. One way one can reduce the 20% or so of people who are line distance dependent — that is, the distance between the exchange and their house — is to run fibre from the exchange to a certain point and then use copper, thereby overcoming the line difficulties. We are considering whether this type of technology can be deployed.
Would there be an interest in expanding the Dungarvan example where the entire town seems to have been linked?
Mr. Doherty
There is also a person in Longford who has done an excellent job in bringing broadband and television services to the local community.
Should ComReg not publish what it knows about the state of the Eircom network? The network seems to be similar to the third secret of Fatima. When I put a question to the Minister last week, he stated only 9% of lines were available. Another person might state the figure is 30%. Someone else might say 50% of lines are in the old system to try to get the phones into every household. We should have that information. A colleague referred to the famous Pittsburgh project of the venture capitalists. Mr. McRedmond did not deny the figures gleaned from the information that came to market about Eircom but would it not be better to be transparent now and give the full information in that regard so we would at least know the state of play?
Reference was made to wireless solutions. They are exciting solutions but are they not fairly expensive? Someone living in a rural location, with no hope of getting broadband, is at a disadvantage compared to urban dwellers or people who live close to an enabled exchange.
Mr. Doherty
I will deal with the fixed wireless question and Ms Goggin will answer the other question. We have provided 78 fixed wireless local access areas. We have a map, which I would be delighted to distribute, which demonstrates their location. The combination of those, with the community broadband initiative undertaken by Government, significantly increases the reach in those areas. The parallel ESB and Esat initiatives in respect of the back hall provide another alternative but it must be recognised that if we need fibre to the cabinet and other models, the combination of the community broadband and the fixed wireless makes a competitive offering but there will be some people in this country who can get broadband only over satellite. That is a realisation of which we must be aware and we must examine the pricing structure that accommodates that.
Eircom said on the record today that it was 8% or 9% up on pair gains in the country. Those are the sort of levels. We have an agreement with Eircom, as DSL deployment comes into place, that it has to remove the pair gains.
Has Mr. Doherty's organisation independently audited that, given the volume of complains we, and journalists, have got as a result of the recent controversy about the situation?
Mr. Doherty
To be candid with the Deputy, the pair gains is an issue. In regard to the DSL enabled exchange, Eircom is mentioning a figure of 3% or 4% in those that are enabled. One aspect on which we will be concentrating is that the current acceptance rate of 77.69% can be moved up to 90%, and we are working with Eircom to get that additional 10% or 12%. We are trying to cluster our prioritisation around the bits that will make the most material difference most quickly. If we could get the figure up to 85% or 90% of those who look for broadband, that would be a significant outcome. As we move forward we will deal with the pair gains and the line distance in so far as there are options, both wireless and fibre to cabinet, as a way of addressing those. We have to accept that we will have to cut and dice every one of these solutions to get to the end game. There is no silver bullet here. We have a good trajectory and we need to bring into play all these aspects if we are to get broadband to most parts of Ireland. That will require a myriad of different solutions, and it certainly will not be all DSL.
Ms Goggin
Deputy Durkan asked whether the degree of competition was evenly spread. No, it is not evenly spread. He is perfectly right in that regard. When liberalisation started certain services were very expensive. International calls and international leased lines for businesses were very expensive at the time. As competition attacked those areas where there were very large margins, the prices have been driven down to the extent that they are now fairly competitive and very little regulation is needed on those services. The next area would be the large corporate market, the asset market, where people can build fibre into business estates and where the amount of business one would get in one lump, so to speak, is enough to attract people to go in and build out. In other areas we have been relying on the idea of access to Eircom's network because the economics are such that it is unlikely someone will replicate the entire network. Building a copper network to every house in an estate or along a road is very expensive.
Where there has been infrastructure based competition in those areas in other countries it has usually come from somebody who has an existing pipe in the ground, and that is mainly cable TV operators. It is a bit of a disappointment to us that has not developed to the extent it could have here. The two main cable companies have been through some well-known financial difficulties but they are at the far end of their financial restructuring now and we hope they will start to invest again and that we will see some competition in that area. We have had to foster infrastructure-based competition where it is feasible and where it is not feasible we have tried to have a combination of other companies getting access to Eircom's network in order to build out and we have placed controls on Eircom's prices in the form of the overall price cap.
In terms of the mobile service, I was surprised to hear what Deputy Durkan said because it is an area on which we do not get many complaints. We used to get them while the network was being rolled out but in terms of the complaints about quality that come into our office, it is fair to say they have decreased appreciably in recent years. Perhaps we could get some details from the Deputy on locations and so on, or is it everywhere?
It is in areas throughout the country. Anybody who travels throughout the country, as we do in our business, will come across areas with no service that had none ten years ago. In regard to breakdown in calls, the problems are worse now than they were ten years ago. Areas in the centre of this city that had a service ten years ago have no service now.
That reminds me of a place in west Cork where one had to stand in the churchyard to get reception.
If I move to the front of my house I cannot get service but if I move to the back of the house I can. I know the delivery of the services is a fine art but it is an extraordinarily expensive service for one who does not have a network of cables, involving the excavation of trenches or anything like that compared to some other countries.
There is a public house I frequent and I have to go outside the door to make a phone call. Deputy Perry wants to put a number of questions but did Ms Goggin answer the other questions?
Ms Goggin
I think so.
Something needs to be done.
Mr. Doherty
We carry out monitoring of the quality of services. We did road tests——
Ms Goggin
It is a question of specific locations.
I was thoroughly impressed by the presentation and the excellent job Eircom is doing. It is very important it has autonomy in the work it does and that it brings regulation into the trade.
With regard to the profit margin, the economy of scale in the market and the fact that Eircom has another obtainable market in the 500,000 to 600,000 lines that have yet to be connected, does it see that levelling out from the point of view of a return on the investment of speculators coming in and leasing the lines from principal operators? What margin of profit does it see in this business that is so attractive it is bringing many people into the trade? It must be good.
Mr. Doherty
As one of those who attended the old school of economics, the theory was that new entrants came into the market only where there was an interesting market to enter.
Yes.
Mr. Doherty
The difference now is that in areas like broadband a good deal of front-end investment has to be made. The yield will come later. For instance, at this time a huge amount of money has to be invested, not just in the "de-slams" in exchanges but in advertising the products and services as well. That answer will vary from product to product——
Is there not a difficulty in that the organisation does not have the full legislative powers to be more forceful in getting into the loop? Are the difficulties being encountered diminishing the possibility of new entrants coming into the market?
Mr. Doherty
I do not think so at this time. The area we have been trying to stimulate is to get more infrastructural competition. We have quite a good level of re-sell in terms of competition in the market but what we need is more infrastructure competition. One tier of such competition is the unbundling of the local loop. Companies like Smart and Esat are increasingly becoming interested in that area. From my perspective, we have been pushing hard to get the industry to identify exactly the issues involved. We deal with those issues as and when we know clearly what they are.
I am thoroughly impressed with ComReg because I have observed how it has operated in recent months. It is building awareness in the industry which is important. I was delighted to note what Mr. Doherty said regarding the local licence and the fact that ComReg is placing emphasis on community partnership, encouraging partnership with peripheral regions and not playing only to the big time actors. Mr. Doherty referred to the public awareness campaign, which is important. Enhancing public awareness in this regard and the involvement of local communities is a good combination.
Mr. Doherty
I could not but endorse that comment.
I have one or two further questions and Deputy Broughan has a final question. I apologise for keeping the representatives so long today.
The committee is conscious that ComReg needs more powers in terms of enforcement. We will also raise this matter in another forum.
We were concerned about over-charging in terms of telephone bills. We are grateful to ComReg for monitoring that and for putting in place a tracking system with different service providers or operators. One such provider, Mr. McRedmond from Eircom, said today that Eircom has included a notice with its telephone bills since September. Is that correct?
Mr. Doherty
Is the Chairman referring specifically to the CPE, to the handset equipment?
Yes.
Mr. Doherty
All I can say on that is that I got one of those in my bill.
Therefore, that is correct.
Mr. Doherty
I assume I was not identified purely as a member of ComReg and targeted for that reason. I take it I was one of a representative section.
I am not sure whether I got one, but I do not want to be unfair to anybody. It is important members of the public are made aware that they could be paying a charge for equipment they do not use. That is a message coming through here today. All operators should advise their customers of this, not by way of an advertisement in the newspapers or on radio, but by inserting a slip in the customer's bill every month. If the operators are sending out bills, surely they could include a notice requesting customers to check their bills as they may be paying for obsolete equipment they no longer use. Customers also should be given a number to call manned by a person who would inform them what to do.
Mr. Doherty
I got such a notice. As a member of ComReg, I have raised this matter a number of times on radio. We have a notice about this on our website, in particular as ComReg, and we are looking at further ways of distributing a hard copy of that information to people.
If a service is being provided by a service provider, whether Eircom or another company, that provider must tell its customers what it is providing. The operator to which I referred receives a fairly well itemised bill, but members of the public are concerned they may be charged for a service they do not receive.
As a postscript to that, is the chairperson sure there are no more skeletons in the cupboard in regard to that issue, equipment, lines and so forth?
Mr. Doherty
This area has not been regulated dating back to 1999. That is the first point. It is not a regulated area. The reason we are involved in this is that we have a statutory obligation to protect consumers and this is an area about which people ought to be aware. We have required itemised billings so that such a charge should be listed. We have also published notice of this on our website. I understand from Eircom that its bills include an inset — of which I was a recipient — identifying this as an issue for people. We take on board that this is an ongoing issue and we will look at ways to continue to raise awareness of it through the industry and ourselves.
A code of practice in relation to tariff presentation for all operators is important. Perhaps you might clarify that with Eircom and e-mail the clerk on whether Eircom is including such a notice with bills.
It is only right that we congratulate you on the work you have done in regard to single billing, which has been of extreme importance to customers. It will give customers a choice in deciding to move to a new operator if they wish to do so. The committee is grateful that ComReg has acted in regard to auto dialling. We would be concerned if it was considering giving a fixed line rental increase to any company in the new year or in the foreseeable future. I hope that will not happen.
Deputy Durkan referred to the continuity of signal. We have just returned from an informative trip to Singapore on mobile telephones and other matters. If a new building is erected in Singapore, care must be taken to ensure it does not block a signal and a signal must be available in such a building. Even though Singapore has a population of 4 million and is an island the size of County Louth, the people there are of the view that no one size fits all. Therefore, they do not have fibre cable in every house or building.
From our report, we are of the view that it is all very well to roll out the broadband infrastructure, but people need to be trained and willing to use it. The CAIT programme was very important. We stated in our report that the Government must ensure everybody in the community gets used to using this technology. Community employment schemes could be used to help people to upgrade their skills and become familiar with such technology. Another important suggestion we made in our report was the issue of scrappage, whereby a person can trade in his or her computer, get a complete new package from a different manufacture and get a tax benefit from that. Such a measure is already provided for companies under last year's budget.
At ComReg's recent conference we heard about the Danish pricing website. What is the timeframe for that website being available?
In the Government reshuffle, was ComReg disappointed when the Taoiseach forgot the country had a Minister responsible for e-governance and the Minister of State, Deputy Kitt, was appointed without reference to his e-governance role? I asked the Taoiseach to remind the Minister of State, Deputy Kitt, that he has ministerial responsibility for e-governance, for which the Minister for Education and Science, Deputy Hanafin, had former responsibility. I know this is a political question but does it alarm ComReg that the Government does not seem to give sufficient attention to this area? We have held six-day and eight-day hearings and have been in session for four hours at a time, yet the media seem to accord the same importance to this area as the Government did in the instance to which I referred.
Mr. Mike Byrne
Iwill take the question on the website. I will not delay the committee but I point out that we announced, as the Deputy mentioned, at our national conference that we will provide a comparative pricing website for the benefit of consumers. We are currently going through the requirements definition for that and we are working closely with our colleagues in other NRAs, particularly in the Danish NRA, to re-use as much of what has been effective from their perspective. Our target is to have something ready towards the middle of 2005, perhaps with its final implementation in the third quarter of that year. We are in the early planning process of it. The response we received from the industry not alone on the day of the national conference but otherwise has been encouraging. The chair has written to each CEO requesting his or her further support for this, which will benefit all consumers and operators. We also expect to receive that.
Mr. Doherty may have heard me speak to Mr. McRedmond about charges for blocking numbers. Will he investigate that or has he a view on it? Is it outrageous that a charge would be incurred for that?
Mr. Doherty
This is a service. We will detail a note for the Chairman and I will send it to the secretary outlining the various elements in respect of it.
I thank your colleagues for their help and support in regard to the various elements and if we can provide information at any time, we would be delighted to do so.
I thank all those who made presentations here today. The mobile phone operators will appear before the committee in a few weeks' time. No doubt we will have much to ponder until then.
The joint committee adjourned at 6.30 p.m. sine die.