On behalf of ComReg, I thank the joint committee for the invitation to brief it on matters relating to Smart Telecom. I will go through a factual opening statement which deals with what happened and what we did about it. It also describes the current situation. I make this statement on my own behalf and that of my fellow ComReg commissioners, Mr. John Doherty and Mr. Mike Byrne. We will then be pleased to answer questions from members of the committee.
We acknowledge and empathise with the very serious problems and difficulties caused to consumers by the events of the past week. Our position is that the withdrawal of services by a wholesale service provider, for whatever reason, without prior notification to consumers is inappropriate and unacceptable in a modern economy such as Ireland's.
Smart Telecom has been in dispute with Eircom since early 2005 in relation to several alleged breaches of the terms of one of their wholesale contracts. On 8 September this year it emerged publicly that Smart Telecom had serious financial issues and the company announced that it had initiated a strategic review of its operations. We briefed the Department of Communications, Marine and Natural Resources about the matter and have, on an ongoing basis, kept it informed about the financial difficulties at Smart Telecom.
ComReg does not have a statutory function in relation to contract debt issues where one operator or one company accrues a debt with another. Nevertheless, in September when we became aware of this issue, we initiated an emergency planning process with Eircom, in the event of the commercial failure of a company or the withdrawal of wholesale services by a service provider. It was not clear at that stage which of those two scenarios was most likely, or if either of them would happen. On a contingency basis, we wanted to go through what would happen if either did. If such emergency planning had not occurred, Smart Telecom customers would have been left with no service.
As part of the emergency plan we had requested Eircom to provide a reasonable period of notice following the formal decision to discontinue service. However, on Monday 2 October it declined our request and announced that one of Smart Telecom's wholesale contracts was being terminated at 5 p.m. that evening. On receiving this formal notification, the emergency plan was activated resulting in the continuation of incoming calls and access to emergency services for customers. Over that Monday evening and Tuesday morning ComReg called all sides to our offices to discuss the issues involved and what steps might still be taken. At that meeting Eircom sought specific financial assurances from Smart Telecom which it could not meet at that juncture. Directly following the meeting and in the light of developments, ComReg met the CEO and directors of Eircom to try to put in place an enhanced set of services for customers for a defined period while allowing consumers to select from more than 30 operators the provider of their choice. These discussions and the detailed work by both teams of experts resulted in all voice consumers getting the return of outgoing calls, as well as the continuation of the existing services, that is, access to emergency services and incoming calls, within 48 hours.
From Monday 2 October we put in place a comprehensive range of consumer information on the current status of events such as switching options with other operators via our website and national press advertisements. We handled more than 3,300 contacts to our consumer line; we received more than 400 e-mail inquiries and assisted via our website more than 300 consumers to access their account numbers which they needed in order to switch providers. In addition, we worked closely with the industry to facilitate a high degree of competition in the marketplace.
It is important to note that Smart Telecom's obligations to its consumers still pertained throughout this incident. They were still customers of a company still operating and with which they had a contract for service. Smart Telecom did not fulfil its obligations to its customers.
On 2 October we specifically requested of Eircom 24 hour prior notification of any proposed service discontinuation. Eircom refused this request. The consequences of this decision to withdraw wholesale services without notice are unacceptable and indicate a requirement to put in place a system to facilitate prior notice in the event of withdrawal of services by a wholesale service provider. We are now working with the Department of Communications, Marine and Natural Resources to devise mechanisms which can be put in place to prevent a similar situation occurring.
It is difficult to envisage circumstances of prior notification in the event of the commercial failure of an operator, the other possibility envisaged. However, in the event of withdrawal of wholesale services by a service provider, circumstances may allow for a reasonable period of notice to be given to a predetermined entity following the formal decision to continue service.