Vol. 478 No. 3
9 Mr. Molloy asked the Minister for Transport, Energy and Communications if he has satisfied himself with the rate of reduction in telephone charges being implemented by Telecom Éireann; and if he will make a statement on the matter. [10853/97]
Since the coming into force on 1 January 1997 of the Telecommunications Tariff Regulation Order made on 16 December 1996 in accordance with section 7 of the Telecommunications (Miscellaneous Provisions) Act, 1996, Telecom Éireann is obliged to effect overall reductions in the basket of tariffs covered by that order of at least CPI-6 per cent annually for the next five years.
Clearly, the implementation of these obligatory reductions will result in substantial real price decreases for customers. The price cap order sets minimum tariff reduction levels which must be achieved over the next five years but competition may well force prices down further in that time.
The level of the price cap is related to the business case underlying the strategic alliance transaction which in turn takes account of the pace at which the company expects to bring its cost base into line with efficient norms.
As the Deputy will be aware, Telecom Éireann recently announced an £80 million price reduction package to be phased in over the next 12 months. This latest package brings to £210 million the value of price reductions introduced by the company since 1995 and demonstrates Telecom Éireann's firm commitment to continuing price reductions, within the framework of the price cap.
