Wednesday, 28 January 2004

Questions (140)

John Dennehy

Question:

253 Mr. Dennehy asked the Minister for Communications, Marine and Natural Resources his views on the significant above-inflation increase over the past 18 months in fixed-line rental charges for consumers, particularly in light of the lack of competition in the market. [2410/04]

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Written answers (Question to Minister for Communications, Marine and Natural Resources)

The regulation of tariffs charged by telecommunication companies is a matter for the independent regulator of the communications sector, the Commission for Communications Regulation, or ComReg.

ComReg's current price-cap decision allows Eircom to increase its retail prices for individual products within a defined basket of services, so long as the overall price of the basket does not exceed the inflation rate of the preceding year. If there are any significant increases in line rental prices, those will have to be accompanied by reductions in the price of other services.

I understand that, while Eircom's residential monthly line rental is one of the most expensive in Europe, overall telecommunications prices in Ireland are around the EU average and have actually decreased by 40% in real terms in recent years.

I am currently considering drafting policy directions to give to ComReg under the powers vested in me by the Communications Regulation Act 2002. In that context, consideration may be given to competition issues in the telecommunications market, including the line rental market.

Policy directions will be at a strategic level only, and I will not be setting individual product prices or instructing ComReg regarding individual product prices.