Dáil Éireann Debate, Thursday - 6 May 2004
6 Mr. Broughan asked the Minister for Finance if, in view of recent statements made that the State is one of the largest users of telecommunications services and should use this power to promote competition on voice and data telecommunications and lower prices, the measures he intends to take to achieve this result; and if he will make a statement on the matter. [10206/04]
Amharc ar fhreagraMy Department has policy responsibility for the public sector usage of telecommunications services. It does not have powers relating to regulation and pricing. Questions in that regard should be directed to my colleague, the Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern.
My Department is, effectively, a customer availing of telecommunications services and, similar to all other customers, is dependent on prevailing market conditions in the telecommunications sector. In addition, my Department, like all Government bodies, is obliged to comply with EU procurement law by sourcing its telecommunication services requirements through open competitions. As a result of taking this competitive approach, Government bodies avail of services provided by all the major telecommunications companies offering services in Ireland.
My Department has implemented all the measures it can implement at this stage to ensure that Departments, offices and non-commercial State agencies have as much access to competitive provision of telecommunications services at best prices as is possible.
My Department sources, negotiated and now manages the Government's virtual private network, VPN, contract which facilitates a range of voice and data telecommunications services, including secure inteconnectivity between public bodies. The contract, or elements thereof, are available for drawdown by any Department, office or non-commercial public body. The contract was awarded to a consortium comprising Eircom and Vodafone Ireland in 2002 on foot of an open EU procurement exercise operated by a cross-sectoral procurement working group. The aggregation of public sector telecommunications demand under the VPN contract ensures that the public service receives maximum value for money and substantial savings in its telecommunications expenditure as a result of the significant discounts available. As a result of this, all other major providers have also reduced their costs to public service bodies.
Although fixed voice services and data services relating to e-Government are mandatory under the VPN contract, all other services are at the discretion of individual bodies. Consequently, my Department has ensured that all other major telecommunications service providers can connect to the Government VPN to allow for the maximum competition in the provision of these services to public bodies.
I expect that we will be able to enhance this situation significantly once framework procurements become possible under the new procurement legislation. This legislation is expected later this year.
This question was originally put to the Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, by my colleague, Deputy Broughan, and it was not our decision to transfer it to the Department of Finance. I am concerned by the Minister's comments. He has not provided figures and I would be grateful if he would do so. What is the value of the total contracts awarded by his Department and among how many companies are the contracts spread? My understanding is that there is now one major——
The Deputy should confine herself to questions. Other Deputies are offering on this question and I wish to facilitate them.
Is it true there is now one major provider of services to the Department of Finance and the Government? Effectively, we are back in a monopoly situation. However, while it was a public monopoly during the Telecom Éireann era, it is now a private monopoly. Will the Minister provide figures on the number of suppliers and the percentage such suppliers hold? Does the Minister agree that many providers in this market are concerned they are not being successful in accessing the provision of services to his Department? The field is dominated by one party so that, effectively, there is a private monopoly.
I accept the Deputy's point that this question was originally put to the Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, and was transferred to my Department. I do not have the relevant figures but my officials will communicate with the Deputy to make them available to her.
I may be able to help Deputy Burton in providing the figures as I am in possession of the replies to a series of questions asked last year on the question of percentage of market share. The Minister will be pleased to hear that his and a number of other Departments, including the Department of Enterprise, Trade and Employment, which one would expect to promote competition, were almost 100% users of supplies from one incumbent monopoly company. This is surprising given the——
Has the Deputy a question?
I do. When is the virtual private network, VPN, next up for review? Will the new legislation, which referred to European legislation, allow for competition issues to be taken into account when considering the best price offer? If the best price offer must be accepted in each case, the incumbent provider obviously has a massive advantage in terms of economies of scale and current dominance in the market, and will always be able to undercut any other bid. Is the Minister allowed to take into account the necessity of introducing competition in the market when making policy decisions? If not, would new legislation allow him to do this?
The VPN contract was awarded to a consortium comprising Eircom and Vodafone in 2002. I think it runs for five years but will confirm the details and make them available to the Deputy.
