Dáil Éireann díospóireacht -
Wednesday, 12 Nov 1997

Vol. 482 No. 6

Written Answers. - Telephone Charges.

Ivan Yates

Ceist:

129 Mr. Yates asked the Minister for Public Enterprise if she has satisfied herself regarding the cost competitiveness of Irish telephone charges for international, local and trunk calls; and if she has discussed proposals with Telecom Éireann to reduce or restructure these charges. [18577/97]

Emmet Stagg

Ceist:

168 Mr. Stagg asked the Minister for Public Enterprise when she will order a further reduction in Telecom charges; and if she will make a statement on the matter. [19038/97]

Minister for Public Enterprise (Mrs. O'Rourke)

I propose to take Questions Nos. 129 and 168 together.

The liberalisation of the telecommunications sector in Ireland is already well under way and this process will be completed on 1 January 2000 when the provision of voice telephony services will be fully liberalised.

The extent of existing competition is already leading to reductions in prices for some telecommunications services, thereby improving the overall cost competitiveness of the sector. With the increase in service-based industries, particularly information-based industries, internationally competitive Telecom charges are critical. It is the Government's policy that Irish telecom charges should be in the top quartile of OECD indicators in terms of price competitiveness. Continued movement towards full liberalisation in this country will result in more choice for users of telecommunications services and will mean further decreases in prices.

In its preparations for full liberalisation, the board of Telecom Éireann has recognised the need to strive to continuously improve the competitiveness of telephone charges for both residential and commercial customers.

As the Deputy will be aware, Telecom Éireann earlier this year announced an £80 million price reduction package to be phased in over 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. There have already been substantial reductions in international charges and the company has indicated its intention, as part of the package, to reduce substantially domestic trunk call charges. I fully support the reduction of charges.

The company is obliged to effect overall reductions of at least the Consumer Price Index (CPI) less 6 per cent annually up to 2002 in the basket of tariffs covered by the Telecommunications Tariff Regulation Order which was made on 16 December 1996 in accordance with section 7 of the Telecommunications (Miscellaneous Provisions) Act, 1996.

The minimum obligatory reductions set out in the price cap order will result in substantial real price decreases for Telecom Éireann customers.

Furthermore, on or after 16 December 1998, two years from the making of the price cap order, I may direct the Director of Telecommunications Regulation to review the order and, in such circumstances, the director may modify the terms of the order. From December 2001, the question of whether further obligatory reductions in Telecom charges are warranted will be a matter for the director.