Wednesday, 10 March 2004

Ceisteanna (25)

Willie Penrose

Ceist:

97 Mr. Penrose asked the Minister for Social and Family Affairs the estimated additional cost to her Department of increases in telephone charges for pensioners and welfare recipients; when the telephone rental allowance will apply to mobile phones which qualifying applicants hold; and if she will make a statement on the matter. [7808/04]

Amharc ar fhreagra

Oral answers (15 contributions) (Ceist ar Minister for Family)

My Department introduced a significant change to the telephone allowance scheme in October 2003. The structure of the allowance was changed to make it a cash credit on bills, not attributable to any particular component of the bill. This change makes it easier for additional service providers to participate in the scheme by applying a standardised allowance amount to bills irrespective of the tariff components.

In conjunction with this change, a special bundle rate — the Eircom social benefits scheme — was negotiated with Eircom, which provided telephone allowance customers with line and equipment rental, plus an enhanced call credit of up to €5.35 worth of free calls per two-month billing period. The cost of the bundle, which is €20.41 plus VAT per month, was at a substantial discount to the previous cost of these services.

The Commission for Telecommunications Regulation, ComReg, recently approved a price increase application from Eircom of 7.5% in line rental, effective from 4 February 2004. A lesser percentage increase is also being applied to telephone instrument rental where applicable. It is my understanding that these increases will be offset by reductions in call costs in order to limit the average private customer bill increase to the consumer price index rate.

Following detailed discussions between officials of my Department and Eircom, it was agreed that the increase in the Eircom social benefits scheme would be limited to the rate of the CPI, which is 1.9%. Some technical restructuring of the social benefits scheme was also agreed which removed some additional call unit value. To offset this, Eircom offered to give low-use customers up to €10 worth of free calls per two-month bill, by offering them its separate vulnerable users scheme, in addition to the social benefit scheme.

The revised package results in an increase to the social welfare customer of €0.94, including VAT, per two-month bill. The other revisions to call costs by Eircom should be broadly beneficial to social welfare customers.

There has not been a significant demand to date from social welfare customers to have the allowance transferred to mobile phones. This may be due to the fact that most customers who have a mobile phone also have a land line. I am committed, however, to the development of the telephone allowance scheme to respond to the expanding telecommunications market and to facilitate greater client choice of telephone services.

My Department has had discussions with the communications regulator, ComReg, to develop the necessary technical and administrative arrangements for mobile phone services. These arrangements are necessary to ensure that the allowance will be applied accurately to individual customer accounts through any licensed service provider interested in participating in the scheme. My Department and ComReg have identified suitable mechanisms to enable this for mobile phone services.

Additional information not given on the floor of the House.

On this basis, I announced in December last that my Department was willing to discuss arrangements with any interested mobile phone service provider. Since then, my Department has had initial discussions with one licensed company and has preliminary contact from two others. In the new environment telephone allowance customers would be entitled to select the participating telephone service provider of their choice to suit their particular circumstances. Allowance customers would be entitled to switch between provider companies within a reasonable period if they so wished. It would be up to the provider companies concerned to design suitable marketing packages to attract and retain these clients, as with any other group.

If the initial interest now being expressed by mobile telephone provider companies develops into active participation, then I would expect that the necessary technical arrangements could be finalised between my Department, the individual companies concerned and ComReg. On that basis, I would expect that the option of applying the telephone allowance to mobile telephone bills could be made available to social welfare customers before the end of this year.

What was the reaction of the mobile telephone network's licence providers to the Minister's attempts to ensure that they would accommodate this request? The problem with many of the schemes in many Departments, including the Minister's, is that they are not brought to public attention as widely as possible. I realise that some Ministers may be criticised for having their photographs taken, but it is important to propagate the news that the rental allowance will be available for mobile telephones. It is essential for that to be done because mobile telephones are of great value to elderly people who will be using them for their own safety. In addition, if they fall ill they can easily summon help without having to leave home.

Eircom seems to be making some concessions but, in view of the many elderly people who lost a lot of money after the company's flotation, I suggest that those poor unfortunate people should receive ten years' free rental for every telephone they have.

Double or nothing.

It would be some way of paying compensation and it would not be charity.

Exactly. It would be compensation.

It is what people deserve. I notice many people are now making money out of it, but the poor are not.

The Minister promoted this matter over the Christmas period and I have also been following it on Committee Stage of the Social Welfare Bill. It is a natural scheme to introduce because everybody has mobile telephones now. I presume that people will not be able to have both, so that the allowance will be either for a mobile or a fixed-line telephone?

Yes, that is right.

I received a query about the free schemes arising from an article in a newspaper last week. Is the Department currently reviewing the free schemes? People are worried that, given all the cutbacks, some of the free schemes will be lost. I received a telephone call from somebody in Dublin this morning asking me if the Department was getting rid of the free schemes. I replied: "No, not that I know of but I suppose we will be the last to be told."

Absolutely. It never changes.

It will probably be announced in the newspapers first and we will hear about it afterwards. Will the Minister confirm that her Department is reviewing the free schemes? Are they facing any danger?

I want to reassure people about that, because when there is a media frenzy, people start going off at a tangent and they pick up things incorrectly. There will be no change to the free schemes.

That is good.

Other than improvements.

Exactly. I agree with the Deputy that was the reason we wanted to include mobile telephones in the allowance scheme. Many people buy them for their parents who find them very handy. They provide security apart from being useful for normal calls. My Department has been in contact with one mobile provider and is meeting two other providers this week to negotiate with them. One of the issues arising from the opening up of the telecommunications market is that we must provide choice. We have always had an agreement with Eircom but ComReg has instructed my Department to invest in providing choice. Arising from that provision of choice for land line telephones, we will now be in a position to provide choice for mobile telephones also. When agreement has been reached on this matter, Members of the House will be informed of the decision.