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Mobile Telephony.

Dáil Éireann Debate, Tuesday - 8 February 2005

Tuesday, 8 February 2005

Questions (29, 30, 31, 32)

Pat Rabbitte

Question:

73 Mr. Rabbitte asked the Minister for Communications, Marine and Natural Resources the consequences of the European Commission’s decision to uphold the recent ruling by the Commission for Communications Regulation that more competition is needed in the mobile phone market here; his views on whether the two main mobile phone companies have operated an effective duopoly here; and if he will make a statement on the matter. [3596/05]

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Joan Burton

Question:

79 Ms Burton asked the Minister for Communications, Marine and Natural Resources if his attention has been drawn to the fact that mobile phone customers here will have to pay significantly more than British subscribers to use third generation mobile phone technology; his views on whether Irish mobile phone charges continue to be excessive in comparison to European norms; his plans to tackle these excessive rates in the mobile phone industry; and if he will make a statement on the matter. [3576/05]

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Paul McGrath

Question:

90 Mr. P. McGrath asked the Minister for Communications, Marine and Natural Resources the extent to which Ireland’s poor rating in the mobile telephone European league is being addressed or likely to be addressed in the near future; and if he will make a statement on the matter. [3664/05]

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Bernard J. Durkan

Question:

314 Mr. Durkan asked the Minister for Communications, Marine and Natural Resources the extent to which Ireland’s poor rating in the mobile telephone European league is being addressed or likely to be addressed in the near future; and if he will make a statement on the matter. [3981/05]

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Written answers

I propose to take Questions Nos. 73, 79, 90 and 314 together.

I have no function in the setting of pricing for phone services. The regulation of telecommunications operators, including pricing for mobile services, 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. As Minister for Communications, Marine and Natural Resources, I have responsibility for overall telecoms 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 best way to drive down 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; the potential of alternative technology delivery platforms to support competition.

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. In 2004 ComReg conducted a market analysis on the mobile market in Ireland and found that Vodafone and O2 hold a joint dominance in that market. ComReg notified the European Commission of its conclusions in December 2004 and the Commission endorsed ComReg's position. The Commission has also endorsed ComReg's proposed remedies. ComReg is now proceeding to implement its remedies to bring more competition into the Irish mobile market.

ComReg's proposed remedies include opening existing networks to alternative service providers such as mobile virtual network operators, MVNOs. They also conclude that any roaming agreements already made between operators will be required to be maintained. This means that O2 will be required to maintain its agreement with Meteor that allows Meteor national roaming on O2's network.

ComReg's remedies should result in greater choice and competition for the consumer. In other European countries where further competition has been developed through the entry of MVNOs, the prices paid by consumers have fallen in some cases by up to 25%.

With regard to pricing for 3G services, only one operator, Vodafone, has commercially launched 3G consumer services. Hutchinson Whampoa, trading as 3, is expected to have achieved 53% demographic coverage by 30 June 2005 and a formal launch of full commercial service is expected around that date. O2 is expected to launch its product in the first quarter of 2005. ComReg expects further competition will develop when the other 3G licensees bring their 3G services to the market resulting in more competitive pricing structures for consumers.

Question No. 74 answered with QuestionNo. 72.
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