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Telecommunications Services.

Dáil Éireann Debate, Tuesday - 30 November 2004

Tuesday, 30 November 2004

Questions (54, 55, 56, 57)

Paul McGrath

Question:

86 Mr. P. McGrath asked the Minister for Communications, Marine and Natural Resources if he has issued instructions or directive regarding the enhancement of competition in the telecommunications industry with the objective of the provision of cost effective and efficient service; and if he will make a statement on the matter. [31212/04]

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Paul Kehoe

Question:

117 Mr. Kehoe asked the Minister for Communications, Marine and Natural Resources if he has issued recent directives in regard to the issue of telecommunications costs here with a view to achieving the degree of competitiveness necessary in this field; and if he will make a statement on the matter. [31210/04]

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Michael Ring

Question:

150 Mr. Ring asked the Minister for Communications, Marine and Natural Resources the way in which he proposes to ensure that telecommunication services here in terms of costs are on a par with those available in other jurisdictions; and if he will make a statement on the matter. [31218/04]

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Bernard J. Durkan

Question:

254 Mr. Durkan asked the Minister for Communications, Marine and Natural Resources if he intends to issue direction to expedite the availability of lower cost mobile telephone services having particular regard to his previous pronouncements on the issue; and if he will make a statement on the matter. [31487/04]

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Written answers

I propose to take Questions Nos. 86, 117, 150 and 254 together.

I have no function in setting of pricing for phone services. The regulation of telecommunications operators, including pricing, is the responsibility of the Commission for Communications Regulation, ComReg, in accordance with the requirements of the Communications Regulation Act 2002 and regulations made under the EU regulatory framework for electronic communications. ComReg has as one of its key objectives, under the Communications Regulation Act 2002 the promotion of competition in the exercise of its functions. Competition in the fixed and mobile markets will drive down prices for consumers.

As Minister for Communications, Marine and Natural Resources, I have responsibility for overall telecommunications policy, and my main goal in this policy is to create conditions for sustainable growth and competition that will benefit the economic and social development of Ireland by providing competitive services.

It is my belief that improving the market conditions to improve competition is the key way that we can drive down the mobile phone charges to the end user. The more competitive telecoms services that are on offer the better in the long run for consumers, the sector and the economy.

In March 2004 my predecessor issued policy directions to ComReg, including a direction on competition. The direction on competition mandates ComReg to focus on competition as a key objective, with a particular focus on competition in the fixed and mobile markets, and to implement where necessary, remedies which counteract or remove barriers to entry and support entry by new players to the market and entry into new sectors by existing players and to have particular regard to the following, market share of new entrants; ensuring that the applicable margin attributable to a product at the wholesale level is sufficient to promote and sustain competition; price level to the end user; and the potential of alternative technology delivery platforms to support competition.

Another policy direction addressed national and cross-Border roaming. The ability to roam nationally on GSM networks would ensure that all three licensed GSM operators could provide countrywide coverage. Minimising cross-Border roaming costs on the island of Ireland would be beneficial for Irish mobile phone users, particularly those who live close to the Border. ComReg is obliged to examine using its powers to mandate national roaming on existing GSM networks of mobile network operators with significant market power on fair commercial terms; and work closely with operators and Ofcom, the regulator for Northern Ireland to encourage and support initiatives that would reduce or eliminate cross-Border roaming charges and encourage national call charging on an all-island basis.

Recognising the importance of a single billing product to advancing competition in the fixed line telephone market, ComReg was also directed to introduce a wholesale line rental product for voice and data services, that was accessible, affordable and with sufficient margin for telecommunications operators to enable them to stimulate and drive competition in this market by 31 March 2004. This product has been introduced and ComReg's most recent report on the policy directions indicates that initial take up of this product has been successful with over 30,000 customers having taken up this product since its launch.

It is true that post-pay mobile phone costs in Ireland remain higher than the EU average but it is also true that in August 2004 the OECD found we had the fourth lowest costs for pre-paid mobile phones. It is important in considering the price competitiveness to the end user to make a judgment across telecommunications services. Furthermore, the current penetration rate of mobile phones of around 90% indicates that Irish business and consumers have a range of products and pricing options which broadly meet their needs.

I also welcome the fact that in July of this year Meteor reached agreement with O2 that allows meteor national roaming on O2's network. This should facilitate greater choice and competition for the consumer, and next year we will have more competition with the launch of new entrant "3s"— 3G services.

With regard to fixed line pricing, ComReg, in its last quarterly market update, indicates that total end-user pricing for both the residential and business sectors in Ireland remains competitive. In terms of the business community, prices for the standard basket put us in sixth place in Europe.

In the residential market Ireland is placed in ninth position. In terms of international calls we are in fourth and sixth place, respectively. This finding is supported by similar benchmarking research by the OECD in relation to international calls which found that Irish international call tariffs to be significantly below the average particularly for off-peak calls. Analysis in the National Competitive Council's report on telecommunications indicates that overall prices have fallen in the past five years by over 9% and these reductions have contributed to a 1% overall reduction in inflation.

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