[INDO]New single-billing option dials up more flexibility for fixed-line customers

Eircom is prepared to take on its rivals as the final obstacle to free movement of domestic phone services is axed by the telecoms regulator

AS the final curtain of regulation over fixed-line telecommunications falls, the battle lines are being drawn between companies hoping to take a jewel from the Eircom crown.

Over the last few months, consumers have been witness to the first moves in what is set to be an all-out battle between phone companies, which were previously limited to billing customers for calls and not line rental.

After moves from the regulator, ComReg, and Communications Minister Dermot Ahern, telecoms firms can now bill for both calls and line rental - single billing - therefore removing the 'hassle' factor of customers getting two bills.

It was this that has been seen by many in the industry as the greatest impediment to customers coming on board independent firms.

So far, Smart Telecom and Access Telecom have been leading the charge, with others set to continue in coming months, putting pressure on Eircom.

The latest ComReg report showed that Eircom lost 27,000 fixed-line customers in the first three months of the year. The defections were attributed to the company raising the price of line rental to €24 a month which sparked consumer outrage.

While fixed-line revenue decreased slightly by 2pc since the previous quarter, according to the ComReg report, the industry views the single billing concept as hugely significant.

Chairman of Alternative Operators in the Telecoms Market (ALTO) Iarla Flynn said that there had been "huge interest" between companies, but that there had not yet been a large marketing campaign launched.

"We hope that it can give consumers a real choice - something they haven't had until now," said Mr Flynn.

"We've seen a lot of parts of the telecoms sector in Ireland open up - particularly for larger business. But your basic line rental service is 90pc-dominated and that hasn't been opened up to competition.

"We're hoping that the single-billing service can crack that open so that thousands and thousands of consumers can get a better deal on their calls."

However, Mr Flynn said that in order for the new system to work, there would need to be a strong presence from ComReg to "ensure competition is fair and clean".

While consumers have been able to switch from Eircom to other operators for their call bills since 2000, the company still retained 90pc of the market, which raised concerns among the independent sector.

Chief executive of Smart Telecom, Oisin Fanning, said that 30,000 customers had signed up to the company's single-billing system so far, and that he expects the company's remaining 22,000 customers to go the same way.

Mr Fanning said that the company plans to invest €100m over two years in an infrastructural system, maintaining that he expects the company to bring on an additional 10,000 customers every month onto the single-billing system.

The company has been carrying out an ongoing marketing campaign to recruit people to the new billing service, maintaining that Smart is between 20pc and 25pc cheaper than Eircom.

While the loss of 27,000 customers was "a concern" for Eircom, commercial director David McRedmond said that the company had reacted to a more competitive environment by the introduction of the Talk Time bundled services.

"We will compete very hard to show our own customers why they should stay with Eircom and we are confident we have the packages to enable us to do so," he said.

"We are also competing hard for customers who have left Eircom. The interesting thing is that 60pc-65pc come back to Eircom."

He attributed the fact of customers moving back to the former state company to dissatisfaction with other operators and a relationship that had been built up previously, drawing comparisons with companies in the UK such as British Gas.

Mr McRedmond said that the idea of two separate packages for phone calls and line rental is "spurious" and that telecom packages have halved in real time price since 1997.

ESAT BT are set to launch their package in October, having already moved a quarter of their 60,000 customer base to the single-billing system.

Director of products Peter Evans said that the company was hoping to double its existing customer base to 120,000 (10pc of the market) within 18 months.

Come October, the company will start an aggressive marketing campaign in order to recruit customers to the service.

From next month, residential customers will only be offered the single-billing package, while commercial customers will still be offered the two-tier, separate bill and call payment, method.

"Single billing is a very simple idea and should have been done years ago.

"We also expect that our churn rates, the rate of customer movement, will drop," said Mr Evans.