I move:
That Seanad Éireann takes note of the Seventh Report of the Fourth Joint Committee on Commercial State-Sponsored Bodies — Bord Telecom Éireann.
Seventh Report of the Fourth Joint Committee on Commercial State-Sponsored Bodies — Bord Telecom Éireann: Motion.
As Senators will note from the foreword to the Seventh Report of the Fourth Joint Committee on State-Sponsored Bodies, this report arises from an investigation by the joint committee of the performance of Bord Telecom Éireann as disclosed in the most recent report and accounts of the company available to that joint committee.
The report sketches the background to the setting up of the company and goes on to examine their finances based on their 1985-86 annual accounts. The report also examines the operations of the company and notes particularly the continuing improvement in the standard of telephone services and also the development of new services by the company.
The conclusion of the joint committee is that they are encouraged by the significant progress made by the company in their relatively short period of existence. The joint committee believe that the performance of the company to date gives grounds for optimism and that their financial performance and the equality and reliability of the services they provide to the public will continue to improve.
Events have moved on since the publication of the fourth joint committee's report. The present joint committee met Bord Telecom on 13 October 1987 and Bord Telecom Éireann's report and accounts for the years 1986-87 and for 1987-88 have been published. I am glad to be able to say that the performance of the company since the report of the fourth joint committee was published has justified the optimism of that joint committee.
In its last financial year, ended 31 March 1988, the company moved into profit for the first time with a surplus of £16.6 million. This compares with a loss of £8 million in the previous year. While the level of profit is modest, it does represent a significant step on the road to full financial viability. The improvement was achieved through a combination of business growth and cost containment. Turnover of £553 million showed an increase of 7 per cent on the previous year. Since there was no change in telecommunications charges during the year all of the increase was accounted for by growth in call traffic and in the customer base. Given the general economic climate this was a very satisfactory outcome. Operating costs relative to turnover declined from 63 per cent in 1986-87 to 59 per cent in 1987-88. Staff numbers fell from 15,100 to 14,600 broadly in line with the planned staff reduction programme. The company thus recorded significant productivity gains as evidenced by the increase to £38,000 turnover per employee per annum compared to the £29,000 in 1985-86 referred to in the report before the House.
Regarding the operations of the company, the total number of customer lines reached a record of 789,000 with the connection of 78,000 new telephone lines. The proportion of households in the country having a telephone stands at an all time high at 57 per cent. Waiting lists fell to 16,000 and, as I mentioned earlier, traffic volume grew in 1987-88 by 9 per cent compared to 8 per cent in the previous year. All exchanges in the country are now automatic and over 45 per cent of customers are now served by digital exchanges.
The company's improved performance in the service area continued with a progressive decline in the incidence of faults. Performance, except for a short period in February 1988, when a storm caused considerable damage to telephone lines, was consistently within the standard of 0.5 faults per station per annum on average.
The average time taken to clear faults also showed an improvement. In the Dublin area computerisation of the repair service centres was completed and the availability of improved facilities for the prompt testing of lines and handling of customer fault reports had a significant effect on overall repair service performance.
For the first time success rates for calls were sustained at consistently above the standard of 98 per cent for local calls and 96 per cent for subscriber trunk dial calls. I draw the attention of the House to the fact that these service indicators along with the targets aimed at are published by Telecom Éireann in their annual report each year.
Since the report of the joint committee was published Telecom Éireann have introduced a number of new services. Telemessage, launched in July 1987 to replace the loss-making inland telegram service, proved successful in generating business. A national automatic paging system was introduced in 1988 and this, too, has been developing successfully. The company's cellular mobile telephone service continues to expand with the number of customers more than doubling last year from 1,000 to 3,500.
An important element of the company's strategy is to develop Ireland as a communications gateway between Europe and the USA for communications intensive businesses. In implementing this strategy the company have made a number of major investments, for example, in a spur to land in Cork on a new transatlantic fibre-optic cable and in a new Ireland-United Kingdom fibre-optic cable between Portmarnock and Holyhead. The company's ability to compete internationally has been attested to by the decision of some major multinationals to use Ireland as a central point or hub for transatlantic traffic. Telecom Éireann are also playing a significant role in the Custom House Docks development project and plans are well advanced for supplying the telecommunications needs of the State.
Despite the enormous capital investment by BTE over the last decade, the company's thrust to improve the network still requires significant amounts of capital expenditure. In 1989, Bord Telecom Éireann will spend £160 million compared with an outturn of £135 million in 1988. The increased allocation will not be a drain on the Exchequer as the investment programme will be funded entirely by the company from their own resources. In addition, grants of over £6 million from the EC STAR Programme will be available and it is expected that a number of BTE's investment projects will qualify for substantial assistance under the European Structural Funds.
In addition to provisions for expected growth, necessary replacements and essential improvements to system security in basic services along with provisions for accelerated development of advanced data and mobile communications systems, an extra £10 million is allocated to deal with the problem of "long lines", that is, connections mainly along the western seaboard requiring more than 0.5 km. of new pole route, and the problem of inadequate cabling in the Dublin area.
Telephone charges in Ireland are still high by international comparisons and Telecom Éireann are painfully aware of this fact. In order to improve their competitive position Telecom Éireann reduced international call charges to the United States, Canada, the European Community and some other countries by 10 per cent on 1 April, 1986. A further reduction of between 20 per cent and 30 per cent for charges to North America, the European Community, Switzerland, Australia, New Zealand, South Africa, Saudi Arabia and the Far East was effected from 1 October, 1988.
The report of the fourth joint committee adverts to the criticism which the company's billing system has attracted in recent years and says that the company introduced a number of measures to try to overcome this problem. Some of these are adverted to in the joint committee's report but I can inform the House that the company have introduced in the Limerick district a system of itemised bills which would give details of all calls dialled other than local calls. The company hopes to extend this gradually to the rest of the country over the next 12 months and expects that it will lead to a significant reduction in the number of complaints about bills and to an increase in the confidence of the customers in the telephone billing system.
The company's business development is being charted by five year corporate plans which are rolled forward annually. The company's fifth corporate plan covering the years 1989-90 to 1993-94 was recently submitted to the Minister for Communications and a summary of the plan is published in Telecom Éireann's report and accounts for the year ended 31 March, 1988.
The key strategic issues addressed in the corporate plan are: an improvement in quality of customer service; price competitiveness and new business development. Regarding the quality of customer service the company plan to raise their existing standards for service provision, fault repairs and service availability progressively over the period of the plan and to widen the concept of customer service. The overall aim is to put the customer at the forefront of the company's ethos and actions.
Price competitiveness remains a major concern. On the basis of the present financial outlook the company expect to be able to hold overall prices stable during the period of the plan while keeping the possibility of reductions in charges to the forefront depending on the company's financial position. However, some adjustments in individual prices will be necessary to bring them more into line with the current costs of providing service. Consequently, some prices may be reduced and counter-balanced by increases in other prices.
With regard to new business development, the company's corporate plan stresses the need to develop new business areas. This will lay the basis for continuing growth in turnover and profitability in the longer term and help solve some continuing problems notably excess staffing in their basic telecommunications services.
In conclusion it is fair to say that the last four years have been, for Telecom Éireann, a period of sustained growth in business and improvement in all round performance culminating in the break through into profit in 1987-88. Current indications are that the profit of £16.5 million recorded in that year will be significantly surpassed in the current year and the company's projections for the next few years point to further progressive advances in all significant areas and to steadily improving financial results.
I am glad we have this report before us today. It affords us an opportunity to make some timely comments about Bord Telecom. We all agree that, since the vesting of Telecom Eireann in January 1984, great progress has been made by the company in streamlining the communications industry and in giving us the modern type of telephone service which a progressive economy like Ireland requires. However, notwithstanding the progress which has been made, we all realise that problems still exist. Until these are addressed and solved we will not have the perception of Bord Telecom that we should have and the public will not be fully satisfied with the company.
Progress has been made in speeding up the provision of service and in the changeover to automatic exchanges in the majority of telephone exchanges throughout the country. There has been an overall improvement in the level of service provided by Telecom Éireann. When one compares the service we have now with the type of service we had ten years ago, one would have to admit that the decision to split up the posts and telecommunications service was a good one. The results that have arisen as a consequence have given us a much improved service, but further progress is necessary.
The waiting time for the installation of a telephone has been reduced dramatically. In many areas a telephone can be made available within five to six weeks of applying for one. That is a major improvement and we must compliment Telecom Éireann on it. We all recall the scenario of five, six and seven years ago when many people had to wait one year or, perhaps, a year and a half to get a telephone after applying for one. Politicians will recall that at that time many of the representations they received were on behalf of people who were waiting for the installation of a telephone apparatus. That position has changed dramatically and those waiting periods no longer apply. We must compliment Telecom Éireann on that.
We must also take note of the major improvement which has occurred in relation to the repair of telephone faults. The Minister referred to this. The majority of telephone faults are now repaired within a short period. This is important not just for the domestic user of a telephone but, more important, for the business user. In competing with the high technology of our European counterparts we must ensure that our telecommunications service is not just up to scratch but is working on a very regular basis and that any faults which occur are repaired within a short period of time. Telecom Éireann have responded very well to this challenge and we can note with satisfaction the response to our calls when repairs are necessary. That is a very positive sign in the whole Telecom scenario at present.
Some of the other services provided by Bord Telecom which have improved dramatically over the past number of years include the telex system which is one of the most modern in the world and the fax system which now seems to be gaining great popularity and is obviously ideal for Irish business people. New services include video conferencing which allows business people to keep in touch with their counterparts in Europe and the United States, the telecard system, the freefone system which is a great plus for advertisers and the new telemessage system which, as the Minister indicated, has replaced the out-dated and expensive telegram system. All these new and in some cases improved services indicate that we are dealing with an organisation in Telecom prepared to meet the challenges for the next decade and working well in that respect. We must welcome these services. They present Bord Telecom as a very positive and progressive communications company.
The entire communications industry today must be noted as a major industry. We are no longer talking about something which just allows neighbours to communicate with each other but an industry which is increasing in scope and magnitude in which new jobs can be created. It is an industry which will allow us to become, as the Minister said, the gateway between Europe and the United States as regards communications. We must take advantage of the opportunities that are on offer as a result of that and Telecom will obviously need large investment if they are to be successful in this regard.
The scope of the investment required may be beyond what the Government can provide at present due to the economic constraints which exist. I hope Bord Telecom will think along the lines of joint ventures with private business in this respect. We have to admit that, because of our small population, it may be unrealistic to speak about privatisation and so on. Telecom are doing a good job and there is no scope for direct competition between Telecom and private business but there is certainly room for joint ventures between Telecom and private business. The whole international communications business allows for opportunities in that respect and I hope Bord Telecom will make direct approaches to private businesses to see what opportunities are open to them. If that is done, it should create more jobs in the communications industry.
The majority of people when talking about Telecom will automatically advert to the billing system, the overcharging, as they see it, and the lack of satisfaction which they get when they make complaints and inquiries to Bord Telecom. The situation here has also improved and obviously, as a result of the intervention of the Ombudsman, more people are satisfied. Still we must note the huge number of people who complain — genuinely, in many cases — about their telephone bills and who seem to get no satisfaction whatsoever from Bord Telecom. Regarding the telephone billing system, Bord Telecom seem to have an "I'm always right, Jack" approach. It would be better if they were more willing to admit error because obviously in many cases errors have occurred.
According to the report of the Ombudsman over the past number of years we can see that the vast majority of complaints have arisen as a result of people who think they have been unfairly treated by Bord Telecom. When that has happened — not just once or twice, but over four and five years — we have to take note of it. We have to accept that there must be something wrong with the billing system and that action must be taken to rectify it.
I welcome the fact that a metering system, with itemised billing, is on offer in one region of the country. It is most important that this service should be provided throughout the country as quickly as possible. I note that the itemised bills refer only to the non-local charges. Many people are concerned about the amount charged for local calls. They continually question the fact that local calls are charged as one unit only. As late as yesterday, I spoke to one person who was able to prove that theory to be wrong. I saw the evidence of a case where local charges were doubling up. Telecom Éireann admitted their mistake but until it was proved through the use of a meter they were unwilling to even discuss the problem. They were assuring the customer that local calls are always charged as one unit, regardless of duration.
When Telecom Éireann can be proved wrong in one case perhaps they can be proved wrong in many cases. The only way around that problem is to provide an itemised billing system for both local and non-local calls. Throughout many European countries at present this sort of billing system applies. When we are talking about telecommunications, computerisation and making available the most modern system to the public we must have the most up-to-date billing system. Only that sort of system will serve the needs of the public at present. Only that sort of system will answer their complaints and their concern.
I regret very much the scrapping some years ago of the telephone users' council. Admittedly, it was a body that had no statutory power. It was only right and fitting that such a body existed to complain, in some sort of unified way, to Telecom Éireann and to act as a voice for the hundreds of thousands of telephone users throughout the country. I hope that some sort of users' council would again be set up. I hope to see a representative of the users' council on the board of Telecom Éireann. At the end of the day the council would represent the users of the telephone system. Telecom Éireann, at board level, must have some sort of contact with the users throughout the country and a representative of the users' council would obviously be very useful in this respect.
I referred earlier to telephone meters. While they are very useful to the consumer in that they will show him on a daily basis and on a per call basis the cost of his call, unfortunately, the evidence from the telephone meter is not taken as conclusive by Telecom Éireann. One further problem that exists at the moment with regard to telephone meters has arisen from the fact that the demand for them is so great that they are now unavailable in many areas of the country. That is unacceptable and I hope it will be rectified in the very near future. Once a person demands the installation of a telephone meter it should be provided immediately. I hope that Telecom Éireann will be able to sort out that problem. I am not sure where they are purchasing the telephone meters from, but if the public are demanding the installation of telephone meters and paying for them on a quarterly rental basis they should be provided on demand.
The cost of telephone calls was referred to by the Minister. I believe this topic was discussed in the other House yesterday. I refer to a report from the small firms' association in which it is argued that telecommunications costs in Ireland are up to 25 per cent higher than those of our competitors in Europe. If that is correct it puts business people in this country at a tremendous disadvantage in dealing with their European counterparts. As we approach the freer markets of 1992 we must try to ensure that we compete on an equal level and that Irish industry is at no disadvantage in competition with European industry. If our telecommunications charges are 25 per cent higher we must try to redress this balance as quickly as possible.
It would appear that the only way of reducing the cost of long distance calls is through an increase in the cost of local calls. That would be unacceptable to the vast majority of people at present. I believe that Telecom Éireann are at present considering dropping the price structure which they say enables people to remain on a local call for as long as they desire for a set charge. That is to be debated further but should it come into force I hope they will allow a five minute time period on the minimum charge. I hope the three minute unit will not apply to local call charges. A minimum of five minutes should be allowed before the meter changes.
On the question of trying to generate extra revenue for Telecom Éireann, reducing the cost of long distance calls etc. is something we have to consider. The Minister gave us figures which show that 57 per cent of houses in the country have a telephone. I see some opportunity here for increasing revenue to Telecom Éireann. Their decision over the past number of years to reduce the telephone rental and installation charges has allowed people who otherwise would not be able to afford it to instal a telephone. If we can increase significantly from 57 per cent the number of homes with a telephone we will allow an increase in revenue to Telecom Éireann.
The Minister in his speech this morning gave us figures for the amount of revenue being generated by the usage of telephones. It was up to almost 70 per cent. On that basis every extra one thousand telephones which will be installed will produce significant extra revenue for Telecom Éireann. I hope that their main priority in seeking extra revenue will be the installation of more units, a further reduction in installation costs, the consideration of further reductions in the cost of rental and the more speedy installation of telephones when applied for. Hopefully, if these measures are introduced more people will be willing to install a telephone in their homes.
One point which I wish to briefly comment on is referred to in the report. It refers to the whole question of the public phone system throughout the country. Obviously, with the increased installation of domestic telephones the usage of these public phones has diminished. The demand has diminished. In many areas the importance of a public telephone has diminished. Unfortunately, there are still many housing estates and many rural areas where a public telephone is very necessary and where, unfortunately, in many cases the public telephone is not working because of vandalism. Obviously, it is no fault of Bord Telecom Éireann that the vandalism problem still exists in so many areas. I admit that through their advertising campaign and their campaign of education through the media, Bord Telecom have made strides to try to do away with the problem of vandalism in the public telephone kiosks.
Unfortunately, a minority of people have not listened. They seem uninterested in listening to the anti-vandalism argument. It is not uncommon to have to go to two, three or even four different public telephones before finding one working. This is very regrettable. Obviously, it is very worrying for people who may be dependent on a public phone to call a doctor or to call somebody in an emergency. Unfortunately, there are many housing estates throughout the country where a public phone could be needed at 3 o'clock or 4 o'clock in the morning and when a person goes to use the phone it is out of order. It certainly is a case of people's lives being put at risk as a result of the attitude of a very small minority of the community.
As public representatives we have all had requests from time to time from people in different areas to try to ensure the installation of public pay phone in their locality. Unfortunately, I now notice from an Bord Telecom a great reluctance to do so. Certainly at county council level the standard reply from Bord Telecom to requests to install a telephone in a housing estate is that it will only be done if the council will guarantee to make up for any loss of revenue which would occur. I cannot see how Bord Telecom can expect to lose money on a public phone if the unit cost per call is 15p or 16p and if every call through a public telephone is costing 20p. Perhaps it is a measure of the difficulty with phone bills, etc.
It is very unfair to ask local government and the local authorities to guarantee the break even situation of public phones. I hope Bord Telecom will take a more sympathetic approach in future to the provision of telephones in new housing estates and in particular in the new council housing estates. If the phone is placed in a central position the residents of the housing estate who may well be dependent on that phone will certainly do the maximum to ensure that no vandalism will occur. I hope the attitude of An Bord Telecom to the provision of phones in these areas will change.
Before I conclude I should like to refer to one other problem. It is the question of free telephone rental for certain social welfare recipients. It is a problem that comes to the notice of public representatives very often. It is most annoying to see people who were given a free telephone rental allowance perhaps a year ago still being charged telephone rental on the bill when it arrives from Telecom Éireann. Obviously, there is some lack of communication between the Department of Social Welfare and Bord Telecom. We consider it most unsatisfactory that the free telephone rental can be granted in January and that 12 months later the charge is still appearing on the bill. Obviously there is some computer mix-up or some computer error. That is something that should be rectified immediately. I can see no reason why a solution to that problem cannot be arrived at in a minimum period of time.
Whilst I feel that An Bord Telecom have made great strides since 1984, there is certainly a long way to go still. The public are not toally convinced of the fairness of the billing system. They are not totally convinced of the correctness of it. This is something we must face up to. It is something about which we have to seek satisfaction from An Bord Telecom Éireann. The whole question of the billing system and of telephone charges must be addressed in the immediate future. If we get our telephone charges in line with the rest of Europe we will be doing something very beneficial to industry. If we can get our telphone billing system modernised, itemised and brought up to the satisfaction of the consumer, the public perception of An Bord Telecom Éireann will change very rapidly.
Notwithstanding that, however, we must note the major improvements in the services over the past number of years — the reduction in waiting time for a telephone, the reduction in waiting time for repairs to be carried out and the overall improvement in the quality of service and the general quality on the other end of the line. It certainly has come a long way from the type of service which we have had up to 1984. The management of Telecom Éireann deserve great credit for their strides in that respect.
Do not forget the workers.
I will not fogret the workers. Senator O'Toole has drawn to my attention something which I did not mention. The report shows the increase in turnover per employee over the past number of years. It has increased dramatically in the past five or six years. They must be commended on that. The rationalisation which has perhaps taken place in the workforce has resulted in a telephone service which is operating at a maximum of productivity at present. The scenario which this has brought about must be commended. It is something which is very beneficial. I hope that in that respect we will see further improvements and further cost reductions as a result of those moves.
I hope that, if we come back in two or three years time to discuss the next report from the present Joint Committee on Commercial State-Sponsored Bodies, the problems of billing and charges will have been addressed and will have been solved. I am sure Telecom Éieann are working towards a solution to these problems.
I welcome this report and congratulate all the Members of the Oireachtas who took part in compiling it. The only thing that amazes me in looking at their names is that six of them are no longer Members of either House, which is the reality of politics. We can all remember a report from American businessmen a few short years ago stating that we had one of the worst telecommunications systems in the western world. The Fianna Fáil Government of 1978 took in hand the serious problem that faced them then and made provision for a £1.4 million telecommunications plan. The success story of the telecommunications system which we have now in 1989 is the result of the foresight and the direction given by the Government and the Minister for Telecommunications at that time.
I remember only too well, as a former employee of the Post Office, how serious the problems were and the enormous amount of complaints received every day. No matter what you did at that time — and no matter what you do today — the public at large are inclined not to believe you because certain information cannot be made available. I want to refer later on to how I think the problem should be approached. The commitment of the Fianna Fáil Government in 1978 resulted in the tremendous progress we have here today. Of course, Deputies Pádraig Faulkner, John Wilson and——
It is a courageous statement.
——Albert Reynolds made a commitment at our party conference on one occasion. It was a commitment no one believed could be delivered on the number of telephones that were to be installed. Ministers, workers, Department officials and everyone coming together and understanding the problems and getting down to street-level approach showed how great the workforce was behind the Minister and his officials. The Government made a serious commitment. An enormous amount of the budget that year was committed to the serious problem that existed. Today the world is just a village in relation to telephone communication. In less than one minute or one and a half minutes, you can be speaking to your friend on the other end of the line in Australia. In less than two minutes you can have proposals back on FAX which is now recognised in the courts. You can sign a contract and have it back in Sydney in another two minutes. That is a massive technological advancement. It is resulting in a situation where we are only a village in relation to business. We have a tremendous system here at present.
No matter what system is in operation it can always be improved on. I would like to think that my short contribution will be a positive one. I always like to think that if I am getting up to criticise something I can make a suggestion on where it can be improved. The 100 per cent automatic exchanges we have around the country at present, are a fantastic start. I remember too well all the breakdowns and the various problems when we had the manual exchanges. These were no fault of the people who were working them at the time. The exchanges were totally out of date. The Aircell system, at present increasing in a year by 350 per cent, show that the modern day businessman can use it to his benefit. With traffic, coming to and going from work can take up to one hour of his time each way. That is two hours in the day. That is 25 per cent of his working day or 20 per cent if he is working a ten hour day. Most senior management, or any self-committed business person, will have to work ten or 12 hours a day. That 20 per cent is an enormous amount of time. A telephone is an absolute essential piece of hardware in his car.
There are certain parts of the country where business people and people who have to use these telephones are more privileged and luckier than those who live in Mullingar who are not covered by the system. I got a phone in my car and kept it for four or five months. When I was coming from Castlepollard every morning, I could not use it until I had nearly reached Kilcock.
Can the Minister throw any light on when we can have this system in the capital of the midlands, which is the Mullingar region? There is a tremendous workforce there. It is a highly industrialised part of the country. It is an area where we can definitely say to the Minister that there will be 200 customers. That is a positive contribution coming from a midland representative.
I remember when we had over 100,000 people on the waiting list for telephones. The figure is now 16,000. That is a tremendous order sheet. The Minister knows he has this demand as he said that demand exists from only 50 per cent of the households. I can see the day in the not too distant future when, if charges stay at their present level and if Telecom Éireann say they will hold charges to a certain level for the three years, we will have 65 per cent of our households with telephones.
We know only too well about people working in cities and coming from the country. The parents are getting on in years. It is a very comforting thought that the parents have a telephone in their home. Their sons or daughters can ring them once a day or twice a week, or whatever. The psychological effect is the feeling: "I am no further away from my family than I am from the telephone in the sitting room or in the office."
It says in this report that the numbers of prospective customers awaiting telephone service are relatively high in the west and north-west areas serviced by the company's Galway and Sligo offices. These are also the main areas where the automation programme remains to be completed. The west was always the last to be serviced. Knock Airport has opened up the gateway for all sorts of business. It has brought good news and encouragement for the unfortunate people in the west in relation to transportation and in relation now to communications. I urgently press the Government and the Minister to speed up automation in the west. The people there have an enormous contribution to make. At political level they are tops in their field, as we all know in this House. They are as good as anyone anywhere else in the country and why should they not have as good a service as anybody else?
I want to move on to the the billing system. I concur with Senator Bradford who said everyone should be entitled to an itemised billing system. The report says it is on trial in the Limerick area. I also concur with the Senator who said that local calls should be itemised as well. We are living in an era of modern technology. It should not be too difficult to have specialised computers in every county or every regional area to account for the billing. The problems we had before the Ombudsman was appointed were incredible, as public representatives all know. Now people are going to the Ombudsman, as well as coming to the public representatives.
We all know they are not satisfied. I would say the ratio is probably 50-50. In 50 per cent of the cases the telecommunications people are correct, and in the other 50 per cent of cases I would say a great injustice is being done to people in relation to the billing system. We have heard of outrageous bills being sent to people. I had personal experience of it about eight yeas ago. In relation to the billing, the objective should be that within a reasonable period of time — and a reasonable period of time would be, say, the lifetime of this Government — we will have a billing system based on the meter system in which everyone can find out where the calls were made, for how long and how much they cost.
One thing that needs to be attacked is the public telephone system. The vandalism in our major towns on public telephones is nothing short of a scandal. As one with experience of public telephone boxes, of having to take the money out and empty them, there are two things I have to say. State or semi-State organisations who install at their own expense telephones on the 50p and 10p units should be made to clear their telephone boxes on a very regular basis before they get choked up. Secondly, they should not be allowed to put signs on those boxes stating that 50p coins only should be used. There are State and semi-State organisations with public telephones and with signs on them saying "50p units only". The main reason for that is that they are not sending their staff around to collect and empty boxes on a once a day basis.
That is not Telecom Éireann.
I want to make a statement about it. About 10,000 people a day use these phones. It is terrible when you go there to make a call to say you will be late, or whatever it is, to find that if you have not got a 50p coin you cannot make your call even though you have two or three 10p coins. That should not be condoned. When one has not got a 50p coin to make a local call one should not be penalised. The only reason I can see for it is that they will not send their staff around on a once a day basis to pick up this money. I have three of these phones in one of my premises and they pay for themselves over a year and a half period using 10p coins. If there are seven or eight units left on the phone and your call is finished, the person who is supplying the telephone makes a profit. These telephones are a self-financing service and people should not be allowed, especially in a State or semi-State organisation, to rip off the public.
(Interruptions.)
Let us make the same rule in the private sector.
The private sector can do what they like in their private homes but if people have a phone in a public place they should not be allowed to do it. Getting back to the vandalised telephone kiosks, it is not just one or two which are vandalised. You can go to five or six on some roads and find them all vandalised. I would like to make a suggestion. Could the engineers not devise some way in which a built-in speaking unit could be installed in public telephone kiosks? We all know that 80 per cent of the problem comes from cable abuse. The cord is pulled out and the phone is rendered useless. If we had built-in speaker units this would help.
I have a friend who designed one for me about a year and a half ago. When I heard Senator Bradford this morning making this point it came back to me. If you are a tall person you have one speaker unit at one height and you can have it down to three feet in the centre of the box. It is a very simple mechanism. It would do away with 80 per cent of the vandalism in phone kiosks. If a pane of glass is broken in the telephone kiosk or if the door is hanging off it does not really matter as long as the phone is working but when the phone is not working it is a useless investment. The engineers should have a look at this and instal built-in speaker units in telephone kiosks. That suggestion could save Bord Telecom hundreds of thousands of pounds over the years and give a magnificent service to the public. The new telephone kiosks are a very heavy metal built-in unit and it is impossible, unless you use a sledgehammer, to break the entire box.
It is always late at night when telephones are vandalised because most of the people who do these things are cowards. They will do it late at night in the dark when people cannot see them. It is usually at night that people need the public telephone and it is the poor, underprivileged and the people living in estates, as Senator Bradford said, who need this service. People in an emergency who are fortunate enough to have a car can drive anywhere and do anything we like. The poor unfortunate whose husband has had a heart attack or whose child is sick has to run down the road at all hours during the night, go into the telephone kiosk and usually find it not working.
It is in the best interests of all those unfortunate people that we come up with a system where those public telephones can be used at all times. If you have a speaker unit, one at three feet for small people, one at four feet, one at five feet and one at six you will always have one you can speak into. If the bottom unit has something wrong with it you still have the other two. You have triplication and no matter what happens nobody can completely break that unit. I would like the Minister to pass on that comment and see if there is any possibility of installing something like this. I welcome the report in general.
Looking through this report it took me until I got to the last page — I wonder if the committee took that long — to find the key to the success of Bord Telecom. This company have gone from being a loss-making millstone around the Exchequer's neck to being a strong, young vibrant, positive company with a committed workforce. I want to read into the record a statement on the very last page of the report that a major development was the conclusion of negotiations with the unions representing the staff for a company wide productivity bonus scheme from 1 January 1988. It stated:
The scheme provides for wide ranging flexibility and productivity measures and the sharing of financial benefits accruing with the staff on a continuing basis.
This statement, as the Acting Chairman with his background and involvement in like areas of negotiation knows, is the key. There can be no progress without flexibility in the workforce, without the introduction of new schemes and new operations agreed around a table.
That is the answer to the success of Bord Telecom. We can look at it in any way we want but, no matter which side we take it from, I have to come back to the point which Senator Bradford made earlier about the annual turnover increase per employee. Look at the amount in one year.
From 1984-85 to 1985-86, it increased from just over £22,000 to almost £30,000. This was the annual turnover increase per employee in one year. That is what we need to recognise here today.
It sickens me that there is no recognition in the Minister's speech of what has been done by the workers on the ground. I hope the Minister will take the opportunity to correct that before he leaves here today. I would expect no more from the Government than that they would put forward the case for management and the case for what has happened in the rarefied atmosphere of the upper management levels of the company.
I have picked a level of duties and responsibilities which would be considered a lower level of operation within Bord Telecom which I want to bring to the attention of the Minister and the House. I want to read into the record the duties of Telecom Officer II, this is the grade in Telecom Éireann which has taken in the grades of clerical assistant, clerical assistant (typist), paperkeeper, etc. — and the way that job has expanded through negotiation and agreement. It goes down through a whole range of duties. These people are paid very low wages — I do not have the precise wage structure — and are at the bottom of the pile. Their duties include casework, calculations, statistical exercises, batching and writing of cheques, factual information either by phone or at the public counter, operating whatever equipment is there, inputting, updating and extracting information from computer based data, opening and closing of circulation advice notes, etc., normal receptionist and secretarial duties, filing, general assistance and accepting of orders. They have the further duties of additional computer work, involvement in meter transfers and reading etc. The list goes on.
The reason I want to read that into the record is that Dr. Smurfit has taken the opportunity on a number of occasions over the past couple of years to criticise the workforce of Telecom Éireann, giving the impression that he was representing the board of Telecom when, in fact, he was not. I could not imagine the same Dr. Michael Smurfit moving into the job of Telecom Officer II, taking it on and trying to get involved in it. It is fine for people to be up in their ivory towers, making airy-fairy suggestions and proposals. I would like to see him on the ground. The previous speaker referred to the workers advancing, progressing and doing what is necessary. They have done it of their own volition. They have done it through concern, commitment and investment in the company of which they are a part.
The workers in Telecom Éireann make a huge contribution to the economy. I should like to put one statistic on the record of the House. In 1985 the workforce in An Post and Telecom Éireann paid more in PAYE, PRSI contributions etc., than the entire farming community. I am not in any sense having a go at farmers. I am simply putting a contrast before the House. These are the workforce we are talking about and their involvement has been the main reason for the remarkable performance of the board over the past number of years.
We should take the opportunity here today to recognise their input in turning around what was a loss-making company, making it a profit-making and industrial leader in this country. At the moment Telecom are contributing over £50 million to the Exchequer. By 1993 it is projected that the profit will be more like £100 million. Let that be the answer to people who say we do not need State involvement or hands on involvement in the State or semi-State structures. We can set up structures which will create a profit and make money for the State.
Many of these issues were recognised in addressing the report. The report deals with the various services, phone, telex, data service, eirpac, air mail, eircell and directories. There is no mention at all of a FAX service, which explains something to me. I was elected almost two years ago to this House. I spent the first year looking for a FAX machine. I could not find one anywhere. I recognise now that it had not come to the attention of elected public representatives that there was such a service. I eventually had to buy one myself for my office in the House. I also feel that the advances which have been made in providing the FAX services have been praiseworthy and have shown major development over the past few years.
I should also like to make two points about the phones which were referred to by Senator Cassidy. It is widely recognised now that the phones he was talking about are the new pay phones which are available to people for trunk calls etc. There are two points to be made about them. First, the receptacle for holding the money is too small and it needs to be redesigned. I do not know why Telecom do not do this. Everybody knows the receptacle is too small. It is true to say that some companies do not clear the boxes often enough. That is their loss because they are a profit-making aspect of any place where they are installed. As Senator Cassidy said, they pay for themselves within a year and a half. Indeed, in a busy location they pay for themselves much quicker than that.
These phones have a receptacle which is too small for holding the coins that are put into it. My second point is that I believe these phones have proven to be too expensive for calls. That is something the report might have adverted to. I do not think these coin boxes were in operation when this report was written. It creates a difficulty at the moment. They are far too expensive and this should be borne in mind.
At the time of this report there were 800,000 telephone lines in the country. That has been extended since then. The workers in Telecom Éireann put in these lines. They were not put in my Michael Smurfit. I will keep stressing that point ad nauseam because the kind of difficulties bad management have put in the way of this company are not taken into consideration.
I want to refer to specific difficulties that have arisen over a period of time. I certainly want to refer to a specific statement which issued from the head office of the Post and Telegraph Workers Union during late 1987. It said:
After the changeover of the payment of wages from An Post to Telecom the scenario has been a catastrophe for members working there and the company has tried to deal with the problems on an ongoing basis. For the most part the problems should not have arisen, had the company, who were so hell bent on getting the work transferred, had themselves properly geared for taking it over in the first place.
I want to stress that point. This progressive union the Post and Telegraph Workers Union, have always been in the vanguard of progress within this company. They have not only been prepared to discuss progress but have put forward the proposals and have very often led in the discussions.
Most of the problems arose from the fact that it was obvious that personnel in various sections were not familiar with or trained to deal with the different grades and the different duties which had to be performed. Suffice it to say that the problems arose on practically every front. This happened because management had not prepared for the changeover; they had not trained the workforce; they had not decided on how to deal with the new changes and therefore problems arose. It is only because there has been an extremely tolerant workforce and an extremely tolerant union that there have not been more problems in Telecom Éireann.
I want to outline the kind of niggling problems which, in normal circumstances, create an amount of hassle in the workplace, problems such as: (1) the undue delay in the payment of arrears due on allowances; and (2) officers on emergency income tax when finally brought in under proper deductions were often left almost without wages for weeks. It is fine for somebody at management level to say: "This person owes a certain amount of tax. We will be taking it from him this week and he can take home £1 instead of £250." How does that person meet his obligations for mortgage repayments, children's clothes, children's books, the cost of education and the various other costs which ordinary workers have to meet?
There is also the payment of moneys relating to attendances over the Christmas period at a time when money is very tight for workers. There are errors in the general application of night duty allowances and so on. I mention those things particularly because in the greater scale of things they will not appear on the report of the Oireachtas Joint Committee on Commercial State-Sponsored Bodies because when public representatives look at Telecom all too often they are talking about the result and the management without looking at the people who deliver the service, who are on the shop floor, on the street or meeting the customer.
Those are the people who have to be looked after. Anybody who has ever run a business knows that if you have not got a productive, efficient and effective workforce you will not produce a service. You can only have that if you recognise their difficulties as well, if you recognise that each and every one has an individual operation to run in paying back bank loans, car loans and paying for the other things I mentioned. This has patently been a failure in the workings of Telecom over the last number of years.
In listing those problems it puts in contrast the fact that while all this was happening we saw an increase in the productivity per employee. Let us not forget that. Let us also not forget that while all that was going on the union were sitting down and negotiating what is commonly called rationalisation with the management of the company, and in one category agreed to redundancies of 3,000 job losses. Do people recognise how painful it is for union negotiators to sit down and negotiate job losses, what a difficult task that is, how difficult it is to go back an explain this to a workforce and how difficult it is to explain to workers that a certain number of jobs will be lost? Do they realise the responsibility the negotiators, on behalf of the PTWE, have shown over the years in dealing with the company? Our congratulations must extend to them as well.
Not only have this union dealt with and suffered the problems of bad management and lack of direction very often within the company but they have also put forward proposals in order to deal with the difficulties. I refer to some of the proposals that were made by the Post and Telegraph Workers' Union to the company early last year. They said that there would be competent staff on duty at all times to make decisions that would avoid undue delay. Could I let that sink in for a minute because we listened earlier to Senator Bradford quite rightly referring to undue delays. The ire of the consumer is always directed at the unfortunate person who lifts the phone at the other end; it will not be Michael Smurfit who will be at the other end to hear from the person outside Fermoy whose phone still has not been repaired after three weeks or who was over-billed for a telephone. It will be a worker representing the company. At the same time, the union are pleading with management that there be competent staff on duty at all times to make decisions that will avoid delay. If we had good management there would be no need to make that kind of proposal.
The second proposal is that there be adequate staff to run the section relating to wages and that wages be paid on time. This is a condition of service matter for the employees. When this union use the phase "adequate staff" their record shows that they are prepared to sit down with management and agree what adequate staff is and their record shows that they have agreed to cutbacks in the numbers of workers in the company so that "adequate staff" does not mean waste or excess. It means enough to do the job. Management should be making that proposal, not the union. It shows that without the progressive attitude of this union we would not be discussing a success story here today.
The third proposal is that where necessary staff be immediately trained in areas where there may be unfamiliar work. Can Senators imagine setting up a company with a lot of complex and different parts of work to be done and putting people who have not been trained to do it? Would the Acting Chairman ask somebody who have never pulled a pint in his or her life, to go behind a bar on a busy night and start serving pints? Would he win customers or would be lose customers? Would it be an inefficient way of doing business or otherwise? That is what we are talking about. We are talking about the unions saying, "If you want to provide a service, let us make sure that the workforce are trained and have the opportunity of doing the job they want to do". This should be a sine qua non. It should be there so that when we move into new services management provide new inservice training for the people who are expected to do the work. In that way the customer who is on the receiving end of the service is satisfied with the result and you do not have people complaining about a half service or a three-quarter service.
The fourth proposal is that the staff have ready access in the company to immediate interpretation of circulars and decisions etc. where doubt arises. This is what causes the problem. Somebody rings up with a query and cannot get an answer. There is nobody there to give an answer, the person who issued the directive is not available and there is delay.
The emphasis coming from the union has been on improving the service, having a more efficient and a more effective workforce. That is the objective of the union. The union recognise that their members cannot walk off the board of Telecom, go over to Oregan or somewhere else and forget about the problems of the country. This union recognise that their members are selling themselves and investing themselves in this company and that they have the greatest vested interest of all. They have more of a vested interest than the people at the top who can move off in new directions or take on new responsibilities. The workforce in Telecom are demanding that it be a profitable, effective company providing an adequate service and to obtain that they will negotiate whatever is necessary and they will do the jobs that are necessary. That is what their record has been and it is because of that we have seen the turnaround in this company.
As we look at the various services that are being provided, the service which I feel has not been developed but which should be developed is in the area of information technology. The world knows that access to information, information technology and the method of assessing information is a huge, developing area and the costs involved are prohibitive. There are 13 different free data banks in the European Community which can be accessed through one of the Telecom services and there are many more for which one has to pay in order to obtain access. However, the cost makes it prohibitive. People are paying for a phone call, for the cost of the phone, for the length of time it takes to gain access to the data bank, for the cost of a licence and another fee. It needs a much more simple cost structure, and it should be based on time. Whatever number of minutes needed for access to information you should pay on that basis. There is a three-tier structure. You pay Telecom, the time for access and you may have to pay a licence or buy the password or whatever it is to get the information. It becomes too complicated.
I have given this a fair amount of consideration over the last number of months. I thought when I came to this august building that access to information, as in the European Community, would be at the touch of a button. As a member of the Joint Services Committee of the Oireachtas, I regret the lack of such a facility. We must be the only Parliament in Europe which does not have such access. I ask Telecom to come in here and set up a structure that will be a showpiece. If people do not believe it can be done, I would advise them to go up to the top floor and see what another semi-State body, RTE, can do, and ask one of the RTE correspondents about the information technology to which they have access. That type of information should be available to Members of both Houses. The technology is there but it is not being used.
The RTE technology is superb and is a showpiece for Europe. Television stations all over Europe come to look at the news-gathering service of RTE and the efficient way in which it works. The work being carried out by that service is astonishing. It is a quiet revolution and the same thing should be happening in information technology generally. I know that such a system is very costly but Telecom should now be working to provide a system which would give us access to, say, Reuters news service or information on a specific area. This area has not been developed by Telecom. They have failed to identify the type market. In other words, Telecom should say to me: "Because you are interested in education and trade union affairs, we will provide you with a service in that and we will give you access to a data bank which will allow you to pick and choose from that at a cost which an ordinary person can meet." That is not happening at present and there is a failure to market in that particular area.
I notice from newspaper reports that Telecom have now developed the confidence to look further afield in their efforts to expand in new areas. They have tendered for one of the new communal piped television systems which is now for sale in the Dublin area. This is a most unusual situation where one semi-State company are tendering for a service which another semi-State company are divesting. In other words, this sub-company of RTE which is now for sale could be bought by Telecom. It is an indication of the technical ability of the staff of Telecom that they can get involved in other areas. This development has come about through pragmatic intervention and the injection of sense into the board by the elected worker-directors of Telecom. The ivory towers of the high management of Telecom have been polluted by good common sense and pragmatism as supplied by the worker-directors who were elected following on the enlightened legislation introduced by Fianna Fáil. I praise the Minister for the changes which have taken place in that respect over the last few years. It is the one aspect I will give them credit for in this area. However, in saying that, I thought Senator Cassidy showed courage and fortitude in referring to the good decisions taken by Fianna Fáil in 1977-78 when in their discussions even they are running away from that period — the world started some time after that.
I want to deal with a number of other issues and to put on the record some of the changes that have taken place in the company over a period of time. On vesting day the company inherited loans and other debts totalling £757 million. After the first 15 months that debt had increased because the company had to invest in expansion. We must recognise that of the money invested in the company during that time, some 79 per cent was borrowed and a huge amount of that was in foreign currency. This did not do much for the country in terms of foreign borrowings but we should give due recognition to the fact that the company took the risk and were able to cope. This cannot be ignored. I think 36 per cent of the money borrowed was in foreign currency. Most of the company's debts are at floating interest rates and are very much susceptible to change. The company may not be in a position to meet their loan obligations when they are due and they may have to resort to rolling over the debt and extending the repayment period but I think the long-term position of the company is recognised as being progressive and we can all have hope in the future of the company.
The workforce in Telecom over the years have moved away from the old-fashioned way of negotiations where workers sat at one side of the table and management on the other and while management fought for profits, the union fought for conditions of services and salary and the stronger side won. That did not do anybody any good. We need educated, strong, committed people on both sides of the table. The PTWU have invested a lot of their own resources in investigating how the company might be run more profitably and effectively and they have taken the opportunity on a number of occasions to make representations on that. I do not think they made a submission on Bord Telecom to the joint committee but I know they made a submission on An Post to the joint committee.
In the early days of the company, I think during 1985, the PTWU got an outside consultancy company, I think it was Craig Gardner, to consider what was happening in the company and to make a report to the board of Telecom. On that occasion the Postal & Telecommunications Workers Union made a very detailed submission on the company. I am not going to go through the detailed submission except to say that it is quite extensive and comprehensive. In many ways I regret I cannot go through it — I am just going to refer to the summary proposals — but anybody who is interested should get a copy of it because it shows very clearly the commitment of the workforce, as represented by their union, in this area. The PTWU made four very narrow proposals which were comprehensively explained in the document. The first PTWU proposal on the future of Telecom was that they wanted to see Telecom expanding and would support the company in every way as long as its strategy and objectives were aligned with the best road forward. Could one ask for a more positive commitment from a workforce than the one reflected in that statement? Their second proposal was that the company's role in regard to the national job creation objective needed to be clarified before any business strategy conclusions were reached.
Let us consider that proposal for a moment. I would say to the Government that here are the people who worry about national policy and who believe that the first objective of the Government is to create employment because they recognise — as a representative of the CII said on the nine o'clock news on Sunday night at Deputy Ray Burke's junket in Malahide — that companies are in the business of making a profit and not creating employment. It is very heartening to hear that kind of honest response from companies because for years I have been describing the Tony O'Reillys and Michael Smurfits as profiteers rather than employment creators. There are people who believe that company leaders seek to create employment and, despite the fact that every time they can they cut back on jobs, people still see them as employment creators rather than profit-makers. This is why I believe we need union involvement at every level in companies, and particularly at board level. Union representatives are committed and they examine every proposal in the context of growth and progress and if a proposal means a loss of jobs, they question whether it is worth it. In other words, they balance the proposal and question what it will cost the State to make people unemployed. That is the type of progress and development envisaged in the Programme for National Recovery.
That is the type of progress which various Ministers have sought from companies and management and yet it is the policy of the union who represent the workers. I want to stress that point again. They believe that the company should definitely be expanded and developed, that they should decide the direction of the company and that having done that they should put it in the context of what it does to workers and to the number of people in employment. In looking at profit and what is going to come out of it they opt for the good of the country. If we could convince the Confederation of Irish Industry on that point I believe this country could be on the high road to real success, success which could be measured by jobs, prosperity of individuals, enhanced family life, better education and health services and all that we aspire to.
The third proposal from the PTWU is that profit and job creation potential lies in the value-added service area and that every effort should be made to develop this by employing personnel becoming free as the core business is destaffed. What does that mean? It simply means that when one is in the process of expanding, developing or changing a company and this creates what is perceived to be excess staffing for that area of service, one should retrain the staff and put them into another area of new expanded business. We should remember that information service technology is exploding across the world at the moment. This company are saying that a person should not be given a job, left there until he or she is 65 years and not allowed to do anything else or to step over demarcation lines. They are saying: "Let us be flexible; let us recognise the growing needs of the community; let us respond to those and to the changes in the company and let our workforce provide new and more efficient services, if that is what is necessary." I put it to the Minister that that is the way forward. Is that not the kind of progress we should be looking for? Is that not the kind of progress that should be highlighted as being most important for the future development of the company?
The telecommunications business grew by 18 per cent in the two years from 1984 to 1986. If we look at the huge, burgeoning increase in employee productivity, the reduction in the operating costs as a percentage of total turnover and the numbers of employees who at present are producing an excellent service on behalf of this company, we have to come back to the bottom line — the credit for this does not lie solely with the people who are running the company at board level and the reason for the success of the company and for what I just outlined is far more likely to be found at the bottom rung of the ladder, the workers who provide the service to the general public.
I should like to compliment the committee on the presentation of this report. They have obviously examined the accounts and operational results of An Bord Telecom in great depth. In this report, An Bord Telecom outline their three main objectives — boosting business growth, reducing operating costs and containing the burden of capital charges. Paragraph 12 of the report confirms that telephone rental in Ireland is higher than in most European countries. High rental charges are big factors in prohibiting persons from installing telephones. I believe economies of scale would prevail if installation rates were reduced.
The company's turnover of £553 million showed an increase of 7 per cent over the previous year. With no increase in charges, this is a very satisfactory performance. The turnover per employee on an annualised basis has increased from £22,510 in 1984 to £29,480 in 1985 and £38,000 in 1987. Great credit is due to the employees of Bord Telecom for these achievements. The company are to be congratulated on their reduction in operating costs as a percentage of turnover from 75 per cent in 1984-85, 69 per cent in 1985-86, 63 per cent in 1986-87 to 59 per cent in 1987-88. The board are to be complimented on their reduction in waiting lists. At this stage I would like to compliment the Minister for Finance, Deputy Albert Reynolds, for his contribution in shortening the waiting lists. In 1984 this list stood at 50,000; in 1985 it was 40,000; in 1986 it was 30,000 and in 1987 it was 16,000. I should like to join with Senator O'Toole in congratulating the Government and the Minister on the progress they have made.
I did not actually do that but it was a nice try anyway.
Paragraph 50 of the report deals with the non-payment of accounts. It states:
Accounts not paid on time give rise to problems for the company. While most telephone customers settle their accounts within the period permitted it is necessary to issue a final notice in one out of every three cases. The company considers the present three month billing cycle too long and it intends to phase in over a period of time, a planned reduction of the billing cycle.
News of Telecom Éireann's "get tough" policy in relation to the non-payment of bills and their move to a more businessorientated approach is ironic given an issue which I am concerned with. Two subscribers in my constituency have not received a bill from Telecom Éireann since the installation of their telephones in November 1987. They have waited for 15 months for a telephone bill. Despite efforts to rectify that no change has taken place. I made various representations to Bord Telecom. In December 1988 I was promised that a telephone bill would be furnished but it was not. In a recent article in The Irish Press the Minister for Communications, Deputy Ray Burke, is reported as saying that there would be a “New tough line on phone bills”. A new tough line is to be taken with people who fail to pay their bills after four and a half months. Surely this is a contradiction given that two of my constituents have not received a bill for 15 months. As I have said, I made various requests to An Bord Telecom to rectify this position. These are young married couples. The two wives are nurses and they need telephones because they are on call at night time. I ask the Minister to ask An Bord Telecom to rectify this position immediately.
A spokesman for Telecom Éireann stated that after a four and a half month period telephones would be cut off and that you would need a guarantor if reconnection was needed. My constituents find that very difficult to accept given that they have not received a bill for 15 months. These young married people who have a lot of demands on them at Christmas time were very much afraid that they would receive a bill over the Christmas period. Telecom need finance and are losing out badly on this revenue while, at the same time, causing severe hardship and worry to these young couples.
I want to welcome the report and to say it is encouraging that since this semi-State body was semi-privatised the workforce and management have got their act together under the chairmanship of Mr. Smurfit. However, I would not like to give the impression that everything in the company is rosy and that there are no problems. That would not be the true picture. We must recognise that a lot of work has gone into the company, a lot of modernisation has taken place and there has been much commitment by both the management and workforce. However, there are many areas we must still question.
The report states that the local call service was highly reliable, with the success rate being very close to the 98 per cent target level while the success rate in relation to trunk calls is estimated at about 93 per cent of the target level. This is a very good achievement but we must consider the amount of money that has been invested in our telecommunications system over the years. The credit for this must go to the then Minister for Posts and Telegraphs Mr. Conor Cruise-O'Brien, who, as many people said was a man before his time. He made no apologies for pumping enormous amounts of money into the Department of Posts and Telegraphs for further investment and modernisation of the tele-communications system, and the result can be seen today. One cannot do that within one or two years or even over a five-year period. I believe we have one of the best telecommunication digital systems in western Europe. This is encouraging but it has not come about at a small cost. We should not give all the merit for this to Bord Telecom. As other speakers have said, there is a need for further modernisation, rationalisation and recognition of the people who are doing the work. There is a commitment on the part of the workforce and management, and rightly so, but the main point is what is being said by the people on the outside.
I think there was a waiting list of 16,000 for new telephones last year and there were approximately 10,000 extra connections. The rental on phones has not been reduced. Is it right that people should have to pay a rental every three months? We should not have to make any apologies to Bord Telecom for saying that there should be competition, as there is in other countries. It would be good for the country if we had two telecommunication companies. We should look at this option in the long term. Is it not sad that Bord Telecom, like our other semi-State body, the ESB, have a total monopoly? That can be bad at times, particularly for people who are in the less well off category. Some people may not be able to afford the cost of electricity yet this service is vital to them. Anybody who says that electricity is not an essential must be living in wonderland.
Every elderly person who lives alone should have a phone. It is only right that they should have some type of telecommunications. It need not necessarily be a phone; it could be some type of alarm system that ties into the phone connection, or whatever. Recently in Cork elderly people were transferred from one house to another because their houses are being renovated. These house are over 100 years old and are being renovated at a cost of £10,000 to £12,000 each. Bord Telecom charge £100 for bringing a phone from one house to another even though the person who lived in the house already had the phone. I believe this is taking things a little too far.
Many of us say that we need a better system and it is sad that an elderly person who already has a phone must pay a reconnection fee even though he might only be moving next door to a house which already has a line. This can create the impression among the general public that their bills are too high because they believe that if Telecom charge an elderly person £100 they are probably doing the same to them. It is bad public relations. A reconnection fee of £100 is too dear and Telecom should not be allowed to charge it. We have a right to question this amount and it would be immoral and disrespectful if we did not do so on behalf of our elders.
I welcome the enormous work that has been done by Bord Telecom. We agreed some time ago that there should be worker directors on the boards of semi-State bodies. The percentage of turnover per employee has increased to £38,000 per annum from the 1985 figure. That is an encouraging trend and it should be continued. If there are profits at the end of the year there is no reason why the employees in Bord Telecom should not be entitled to a share of those profits. That would be good for both the State and for morale.
If people are prepared to give the commitment then they should get a share of the profits of the company at the end of the year. However, I am not saying that these should just be handed out or that the people working for Bord Telecom should get priority over those who are working for other companies. Bord Telecom are spending in the region of £160 million per year in developing their telephone system. They have increased their expenditure from £135 million last year to £160 million this year, over £3 million per week. As Senator O'Toole already said, if the trade unions and management want more rationalisation and diversification so that people will have different things to do every day instead of doing the same thing until they reach 65 years, I make no apology for saying that these employees should be able to buy shares in the company. Why should the workers in Bord Telecom not be allowed to buy shares for a certain sum?
If employees have a share allocation in the company, profits will increase. That is obvious because a certain amount of the profits will go back to them. I am aware of many companies who have done this in the private sector and are now very prosperous. In saying that I am very conscious of reconnection fees. Bord Telecom have a rather ruthless attitude towards people in regard to reconnection fee. The Post Office were always very considerate at times when bills were due to be paid, in particular if people found it a little difficult to pay. Telephones were not disconnected until after customers had received a second bill. I now notice that, in both the business and private sector, people are disconnected on the first bill and a reconnection fee of £15 is charged. I know of one or two people to whom this has happened and they got quite a shock. That is not good for public relations when there is no need for it. At one time a person got a telephone call to say the bill was due and should be paid or there would be a question of disconnection. That does not happen any more. The company should not be allowed to do that and yet have a monopoly. Where there is a monopoly such as this people are inclined to take advantage of it. We must not allow this. People are sending out bills knowing that the customer can go nowhere else. There must be a happy medium.
Senator Cassidy made a very good point in relation to the cost of public telephones. I would like to add to it. Some years ago one could purchase a coin box telephone from Bord Telecom. That cannot be done now. They are not prepared to sell these telephones any more; they will only lease them. That is taking advantage of the person who needs the phone. They will not allow him to purchase it because they want to charge him so much a quarter for it in rental and this rental is on going. We should make no apologies for saying this. We should allow private business to provide a telephone and the line should be provided by Bord Telecom.
Why should Bord Telecom have all the facilities? Somebody else should be allowed to provide the equipment and have it connected to a line rented from Bord Telecom. Why buy all the equipment from Bord Telecom? There is a total monopoly involved there. It is the same as saying that one must buy from the ESB or one must get on a CIE bus or, as was the case until a few years ago, one had to fly with Aer Lingus. I am glad to say that is not happening any more and it has been proved to be advantageous to everyone. The same should apply in relation to Bord Telecom. It is good for business because it will create more motivation.
There is no reason why Bord Telecom should be supplying all the equipment. There is no reason why I should have to go to them if I want to get a new telephone, or if I want to rent a line that I should take it from them. This does not happen in other countries and it is only right. Why should Bord Telecom be able to say to an elderly person, who is, unfortunately, obliged to transfer from one house to another that he or she must pay £100 to be connected when the line is already provided? They should be made to provide the line into the house and, if they do not provide it, somebody else should be able to provide it. Why should they charge £100 to reconnect such a person's telephone? I am sure none of us here would like to be charged this fee. It is very bad for business in our country to be seen to be giving a monopoly to one person or one group.
Apart from that I welcome the report and am happy to say that this is a bright report that is before us for a change. I hope there will be further advances but at the same time we should keep a watchful eye on developments.
I welcome the opportunity to make a contribution to this debate and I compliment the members of the committee who compiled this very comprehensive report.
In 1978 the Fianna Fáil Government recognised that, if Ireland was to develop its industrial and commercial base into the eighties, the nineties and the 21st century, the telecommunications service needed major rejuvenation and a complete overhaul. The company at that time, as we all know, was in a sorry state. Morale was low. It was over-manned and losses were running in excess of £100 million per annum. On 8 July 1978 the then Minister, Padraig Faulkner, set up a review group with clearly defined terms of reference. The review group reported in May 1979 and its basic recommendation was to take both the telecommunications and the postal service out of the Civil Service. On 3 July 1979 the Government announced acceptance of the recommendations and the initiation of the telecommunications programme. An interim board of directors was set up under the chairmanship of Dr. Michael Smurfit. Later on that year the Ministers changed and Deputy Albert Reynolds took over. Following the publication of a Green Paper and a White Paper the Postal and Telecommunications Service Bill, 1982, was enacted. The Bill implemented the White Paper and two State-sponsored bodies were established, An Post and Bord Telecom.
Both bodies were fortunate in acquiring the services of two of the most successful businessmen recognised not only in Ireland but worldwide for their business acumen. I believe that this country owes a great debt of gratitude to Dr. Michael Smurfit, chairman of Bord Telecom and Mr. Fergal Quinn, chairman of An Post. Dr. Smurfit clearly recognised and stated at that time that the country's telecommunications system would not be transformed overnight and would require expert and patient reorganisation and direction.
Since vesting day, as stated in this report, the company have made significant progress. The Minister clearly indicated that this growth has been sustained down through the years. The company have becomes sales orientated. The waiting list syndrome has been dealt with and the company have succeeded by and large, in supplying telephones to customers when they wanted them and not when, as happened in the past, some civil servant decided that they could have telephones. There is still a waiting list but it has been reduced substantially. In many parts of Dublin now telephone lines can be obtained after a few weeks.
A major development programme was initiated to modernise the network and improve the quality of the telephone service. Again, thanks to expert leadership and astute management, Ireland now enjoys one of the most modern and efficient telecommunications systems in the world. This transformation has cost money and capital investment to implement the necessary programmes and to adopt the latest technologies. The company have grown steadily over the years and have been stabilised and have succeeded by and large in getting costs under control.
The new management accepted that there were problem areas. Customer relations have been improved but this is an area which needs continuous attention. The annual reports of the Ombudsman in 1985 and 1986 had to deal with a level of complaints which was well above the European average and gave rise to serious concern. However, the Ombudsman's report now states that satisfactory arrangements have been arrived at in the company's relationship with the Ombudsman and in the majority of cases the company accepts his recommendations. With a view to improving customer relationships the company have put in train at an estimated cost of £20 million for the purpose of metering long distance calls a call-logging detailed billing system which will provide customers with as much information as possible on individual call charges and I believe it will result in better customer relations. I am pleased to hear from the Minister that significant progress has been made in this area and that Bord Telecom have a pilot scheme in operation in the Limerick area. I know I am at one with other Senators in calling on Bord Telecom to move quickly and cover the whole country with this logging system.
The company recognise that another problem area is the provision of public telephones and their maintenance. The company concede that because of the high level of vandalism, which is costing up to £1 million per annum, the public's perception of the public telephone service has been justifiably poor. I am pleased that Bord Telecom realise that improvements in this area are a priority and, as such, they have implemented a detailed action plan. They intend to improve the service by speedier maintenance, by better cash collection procedures and by discouraging vandalism which is not an easy task. They also have been successful in providing public telephones which are more attractive. They have embarked on a policy of installing public telephones in semi-protected areas. I compliment them on the design of the new telephone systems. Not alone are the new public pay phones more attractive and aesthetically pleasing but they are also stronger and more robust.
When reading through some of the old reports I came across an address made by Dr. Smurfit to the joint committee in May 1986. He indicated that the company intended in the course of time to try to get communities to look after the telephone kiosks in their areas. I am very pleased that in my own town this idea has been taken on board. A new kiosk was installed recently in Marley Court estate. The chairman and committee of the residents' association formally adopted the kiosk and they have stated publicly that they will take personal responsibility for it. I compliment the local newspaper for giving this front page coverage. It is only with this type of civic spirit and pride in an estate and in the facilities provided in it that we will combat vandalism. Dr. Smurfit was very prophetic in this area. It is significant that these people were waiting nearly three years for this kiosk. That may have been a good thing.
As a local councillor, I have been advocating that telephone kiosks should be put in from day one but here you had an example of an outlying part of the town, a difficult area to service, requiring a long run of telephone cable to be laid and the people had to wait three years. In those three years they realised how essential and important is a telephone in an area like that. There were very few private telephones there. A telephone could save a life; it could be needed in the middle of the night in order to call a doctor for a sick child or whatever. They now clearly appreciate what they have. I compliment them in stating publicly that they will take responsibility for the upkeep of this kiosk.
Another area of the service that gets a lot of publicity is the provision of specially adapted public telephones for handicapped people and people in wheelchairs. This is another bone of contention in my own town. We have been exhorting Bord Telecom not alone to provide a public telephone at a height suitable for a person in a wheelchair but we have also provided special ramps on all the public footpaths in order that people in wheelchairs can negotiate the town comfortably and if they feel they need to communicate with home would have suitable public phones available to allow them to do so.
The report also deals with the telex service. It states that there are over 7,300 telex customers and that telex penetration in Ireland is high by international standards. However, it is an indication of the speed of development of new technology in this field that since this report was published, by and large, the facsimile machine has taken over the role of the telex machine in many cases. It provides, in my opinion, a far more efficient and comprehensive means of communication; it is simpler to use and is less expensive.
In addition to facsimile, a number of new services have also come onstream in the past four years. Airpack which is a special packet switchboard network for data transmission which commenced in December 1984 has also proved very successful, with sustained customer growth over the years. Airmail is an electronic mail box service which was introduced in 1985 as a value-added service to Airpack and has also proved successful and profitable. Aircell, the mobile radio telephone system, was launched in December 1985 and this service is available in many areas throughout the country. It has been hailed by the business sector as one of the most useful services to come on-stream.
However, like other Senators, I stress there are still a number of blank areas and unfortunately, my own town of Drogheda is one of them. I ask Bord Telecom to take whatever steps are necessary to provide a comprehensive service to cover all the areas in the country. Telemessage was launched in July 1987 to replace the loss-making inland telegram service and it has proved successful in generating new business. It is a major improvement on the old telegram service, utilising attractive cards to communicate messages of congratulations and condolences.
As the Minister pointed out in his excellent address, the company's five year role in corporate plan, covering the years 1989-1990 and 1993-1994 which was recently submitted to him highlights key strategic issues that need to be addressed. They were stated as: improvement in the quality of customer service; price competitiveness; and new business development. This indicates clearly that Bord Telecom recognise that in a progressive and successful company there is no room for complacency.
I am pleased that the company predict a sustained growth in business. I take the opportunity once again to congratulate the Minister responsible for this area and, indeed, to congratulate Dr. Smurfit, his board of directors, his management team and all of the employees of Bord Telecom. They are now giving us a company which will serve us well with the advent of 1992. But for the improvements and the transformation of An Bord Telecom we could not avail of the unique opportunities with which the completion of the internal market will provide us.
I am very glad to have this opportunity to bring the Seanad up to date on the finances and operations of Telecom Éireann. I have listened with great attention to the cogent views put forward by Senators and I will bring them to the attention of the Minister for Communications. I would like to thank Senators for the constructive comments which we have had on the report of the joint committee. There were a number of comments complimenting the company on their performance and I will ensure that they are brought to the attention of the board of Telecom Éireann.
Some speakers hoped that the Minister would intervene with Telecom Éireann in areas other than the overall policy of the company. Senators will know that it is not the practice for Ministers to intervene in the day-to-day operations of a State-sponsored body. Indeed, in the case of Telecom Éireann the legislation which set up the company, the Posts and Telecommunications Services Act, 1983 requires the company to furnish to the Minister such information as he may require in relation to the policy and operations of the company other than day-to-day operations. I would underline those last six words, "other than day-to-day operations". However, Senators can rest assured that the record of this debate will be brought to the attention of the board. I am sure they will examine the comments made during this debate and see if there is any area of their operations which should be looked at again in the light of Senators' comments or if there are any particular problems highlighted by them which require the attention of the board and management.
Senator O'Toole was concerned that in my initial speech I had not adverted to the staff of Telecom Éireann. The Minister has on many occasions publicly acknowledged the enromous contribution made by the staff of Telecom Éireann to achieve the turnaround in performance. I again take this opportunity to publicly acknowledge the magnificent performance of Bord Telecom Éireann staff and also publicly acknowledge the major role which the chairman, Dr. Smurfit, and the board of Bord Telecom Éireann have played in achieving this great change and success by the company over such a short period of time.
There were some other queries which it might be appropriate to deal with. As I said in my opening speech, Telecom Éireann are setting aside a specific allocation of £10 million in 1989 to address the problem of long line connections mainly along the western seaboard. This certainly should solve some of the problems that now exist.
Telecom Éireann's policy on public pay phones is to provide such phones where they will pay their way under guarantee by local authorities on a temporary basis at specific events and in exceptional circumstances for social reasons. I am afraid that vandalism of telephone kiosks still remains a very serious problem. Telecom Éireann have launched a publicity campaign against vandalism. As a result costs directly associated with vandalism decreased but there is still far too much vandalism and there is still much to be done to stamp it out. As has been said, it is costing approximately £1 million per year, quite an enormous sum.
During the current year the company plan to instal over 1,000 modern public pay phones bringing to 5,000 the number of fully automatic pay phones. Some new card-operated pay phones have also been introduced. Senators can be assured that Telecom Éireann will continue to strive to improve the service availability of public telephones by speedier maintenance, better cash collection procedures, providing public pay phones in semi-protected areas and by providing stronger, more vandal-proof telephone kiosks. As the Minister for Communications said in the Dáil yesterday, a straight comparison of tariffs or charges among different countries is not meaningful because of the complexity of pricing structures and for other reasons. The major difference between Ireland and other European Community countries is that we do not have local call tagging. In addition, it should be noted that the size of the local call area in Ireland is significantly above the EC average and customers have the facility to make local calls up to an average radius of 30 kilometres as compared with a European Community average of 16 kilometres.
Telecom Éireann are acutely aware of the need to reduce prices to competitive levels and it was principally this fact that prompted reductions of 20 per cent, 25 per cent and in some cases 30 per cent in international call charges from 1 October 1988. The possibility of further reductions by Telecom Éireann in telephone charges is being kept under review but this possibility will, of course, depend on the company's financial position from year to year. However, it must be pointed out that charges overall have fallen by 12 per cent in real terms since 1984.
Senator Cregan adverted to shares. I would like to inform the Senator that — as he probably knows — Bord Telecom Éireann employees already benefit from the profits of the company through the company's bonus scheme. This is a very good incentive.
Finally, I would like to thank all the member of the Oireachtas joint committee for the work they put into this seventh report, it being the first report of the activities of Telecom Éireann. I recognise that the committee had considerable homework to do and this certainly must have put many demands on their time. I would like to compliment the committee on the report. I would again like to thank the Members of this House for their very worthwhile contributions. They will certainly be conveyed to the board. I am sure that some of the suggestions that Senators have made will be acted upon and will ensure that we have a more efficient service in the future.
Question put and agreed to.
When is it proposed to sit again?
At 2.30 p.m. on Wednesday, 8 February 1989.