Dáil Éireann díospóireacht -
Tuesday, 14 Nov 1995

Vol. 458 No. 2

Written Answers. - Mobile Phone Costs.

Seamus Brennan

Ceist:

166 Mr. S. Brennan asked the Minister for Transport, Energy and Communications if his attention has been drawn to the enormous differences in cost in mobile phone communications in the increasing single island economy north and south; the average cost of mobile phones provided by Telecom Éireann and the average tariff together with the corresponding figures from British Telecom, Northern Ireland; and the action, if any, he can take to overcome the effect of this on national competitiveness. [16667/95]

Minister for Transport, Energy and Communications (Mr. Lowry)

It must be emphasised that the market for mobile telephony in the UK, including Northern Ireland, is starkly different to that in the Republic. The UK market has been fully liberalised for several years and a number of competitive offerings are available. One feature of the competitive UK market is the sale of handsets at subsidised prices to customers who enter a contractual commitment to a single service provider for a number of years. The cost of the subsidy is then recovered through relatively high rentals and call charges. It is noteworthy that this type of terminal price subsidy in the UK applies to new connections only. If a customer loses his-her mobile phone or if it is stolen, he-she must pay the full price of a replacement phone and that price will be largely similar to the price paid in Ireland. Hence, when like is compared with like, prices of comparable mobile phones in over-the-counter transactions are roughly equivalent here and in the North.

Since the Irish market is primarily business based at present, the tables below compare the mobile charges for the business customers of Telecom Éireann's Eircell here in the south with those offered by British Telecom's mobile subsidiary, Cellnet, which operates in the North. All figures listed are VAT exclusive.

Charges for Analogue Service

	Cellnet	Eircell
Monthly Rental	£20	£20
Peak Calls	24p	22p
	per min.	per min.
Off-Peak Calls	9p	15p
	per min.	per min.

Charges for GSM Service

	Cellnet	Eircell
Monthly Rental	£24	£20
		(£5 rebate on this list price has been offered since launch of service)
Peak Calls	24p	25p
	per min.	per min.
Off-Peak Calls	10p	17p
	per min.	per min.

It is clear that the Eircell charges for monthly rental are particularly competitive; indeed when the £5 rebate on GSM rental is taken into account, Eircell's actual monthly charge of £15 is fully 37.5 per cent cheaper than the £24 demanded from Cellnet's GSM customers in the North. It should also be noted that the rental fee charged by Eircell provides the mobile customer with a range of value added services free of charge. These include 24-hour automated answering service, directory assistance, call divert and call waiting facilities together with an alarm clock service. UK operators offer similar services but usually at an additional cost. The Eircell airtime rates are also quite competitive; the peak charge for Analogue service is the tariff of most relevance to the average business user here and is, at 22p per minute, over 8 per cent cheaper than its British Telecom equivalent. The corresponding peak charge for the GSM service is only slightly higher than the UK equivalent.

As the Deputy is aware, I have already taken action which will ensure the development of competitive mobile telephony services in the Republic of Ireland. Indeed the whole thrust of my policy on mobile telephony is, through competition, to achieve much wider penetration and ownership at affordable prices. I recently announced Esat Digifone as the winner in the competition to become Ireland's second mobile operator. One of the selection criteria in that competition was the applicant's approach to tariffing and I am satisfied that the introduction of competition in the Irish mobile market with the presence of Esat Digifone from late 1996 onwards will lead to a considerable drop in the cost of mobile telephony, as well as a wider choice and availability of service, for business and consumer users alike. Indeed there is evidence to show that Telecom Éireann's Eircell is already responding to the emerging prospect of competition and I am sure that the Deputy will have noted the steady fall in the price of mobile phones here in recent times. Such improvements in the cost of telecommunications services, together with their wider availability, will inevitably have a positive impact on Ireland's competitiveness.