This is the fifth Telephone Capital Bill since the transfer of the services in 1922. Funds for the development of the telephone service, that is, for the extension of the system as distinct from its operation and maintenance, are provided by the Telephone Capital Acts. These Acts authorise the Minister for Finance to issue out of the Central Fund such sums, not exceeding a stipulated amount, as may be required for the development of the telephone service, in accordance with estimates approved by the Minister for Finance. The moneys so provided are raised by means of terminable annuities extending over a period not exceeding 20 years. The present Bill provides for a sum not exceeding £1,000,000, which amount will, it is anticipated, suffice for requirements for a period of about five years. This provision, together with the moneys provided in the four previous Acts—£1,750,000—will bring the total amount provided by the State for telephone development since the transfer of services to £2,750,000. It was anticipated that the amount of £500,000 provided by the last Telephone Capital Act of 1936 would cover expenditure for four or five years. Telephone charges were, however, substantially reduced in July, 1936, and the increased rate of development which followed the reductions necessitated unprecedentedly heavy outlay for additional plant and apparatus. Of the money provided by the Act of 1936, £168,000 is still undrawn, but as the capital programme for the current financial year will involve about £300,000, the balance available will be exhausted in the next three or four months. The present Bill is accordingly necessary to provide further funds.
There are now 26,400 telephone subscribers, an increase of 3,000 during the past two years; 40,500 telephones in use, an increase of 3,800; 793 telephone exchanges and 1,485 call offices and kiosks—increases of 38 and 47 respectively. During the 12 months ended 30th June last, 29,400,000 local calls and 3,200,000 trunk calls were made, representing increases of 3,400,000 and 800,000 on the figures for the year ended 30th June, 1936. This gives some idea of the development of the service which has taken place in recent times.
Amongst the major works carried out during the past two years were: (a) the extension of the automatic system in Dublin. This embraced the installation of new automatic exchanges in Crown Alley and Clontarf, also the closing of the Drumcondra and the Dundrum manual exchanges and the transfer of the subscribers' circuits served from them to the Crown Alley and Terenure automatic exchanges, respectively. (b) The provision of a large number of additional trunk circuits to carry the greatly increased trunk traffic. The increase in circuit accomodation and the introduction of the up-to-date "carrier" system on the main trunk routes has materially improved the standard of the service both as regards expedition and the quality of transmission. (c) The laying of a new cross-Channel cable of the most modern type between Howth and Nevin, North Wales. The increase in cross-Channel traffic has been considerable, particularly after 7 p.m., when the low night rates apply; and in addition to the new cable recently laid it has been necessary to arrange for the provision of a further cable, the laying of which is about to commence. When the two new cables are fully functioning 16 cross-Channel telephone circuits will be available for public use, and a first-class service will be ensured.
The financial position of the service is satisfactory. A profit was made for the first time in the year 1931-32. This profit increased yearly to 1935-36, when it reached £105,702, but following the reduction in tariffs it fell in the year 1936-37 to £73,833, and it is expected that the accounts for the year 1937-38 will show a further fall. Expenditure is naturally growing by reason of extensions of equipment, increased staff costs, etc., but, on the other hand, revenue is increasing steadily. While, however, revenue will continue to grow, the profit on the service is not likely to show any upward tendency in the near future as the capital outlay must, in order to meet growing public needs, continue high for some years to come. I do not think that it will be possible during the next five years to keep capital expenditure below an average of £200,000 a year.
The programme of major capital works during the coming five year period includes in addition to the normal works involved in the provision of service to new subscribers, etc:— extension of automatic equipment in Dublin, a new automatic exchange for Dun Laoghaire and surrounding districts; new automatic exchanges in Cork and Dundalk, and possibly also in Waterford, Galway and Sligo, a new central trunk exchange in Dublin, additional overhead trunk circuits, a second new cross-Channel cable, underground cabling of certain main trunk routes on which overhead lines are overloaded; extensions of equipment in manual exchanges and installations of additional "carrier" circuits on main trunk routes, etc. With the exception of the Erris Peninsula, County Mayo, an area which is at present under special consideration, no important or extensive locality throughout the country is now unprovided with telephone service.