Switching charges Eircom Fixed Line

machalla

Can someone explain to me how this is supposed to be a good thing? I vaguely remember seeing something about it here before. This is obviously only good for the Eircon monopoly it seems to me? This will prevent customer switching which can only be a disaster for competition in the residential phone markeplace.


http://www.enn.ie/frontpage/news-9395660.html

"The same paper reports that telecoms regulator ComReg has directed Eircom to reduce the charge made to rivals for customers who switch from Eircom's fixed-line services. ComReg wants an interim price of EUR9.16, a 62 percent reduction on the EUR24 fee originally proposed by Eircom. The direction comes ahead of the 1 March deadline set by Minister for Communications Dermot Ahern for the introduction of wholesale line rental."

seamus

While it doesn't do anything to eliminate eircom's monopoly on the fixed-line market, it does do one thing, which I believe is subtle but crucial, and that's the single-bill argument.

For years now eircom have been using the "All your charges on one bill" line as a selling point to keep existing customers and to win back customers. It's extremely cheeky. They've been fighting LLU and wholesale line rental, because apparently its a big selling point, and they know it. It may not mean much to us, who are used to having everything on Direct Debit or online banking, but for the majority of phone users (i.e. Bridie O'Malley from Gortalougha and Daithi Mac an tSionnaigh from Carraroe) it's huge. People have been skimming over it, and while it doesn't end the monopoly, I believe it will generate massive competition in the market for calls. If people can have one bill with all their charges, no matter who they switch to, they will switch. Eircom are more expensive generally, and people know it. There is also a lot of bad blood between eircom and the Irish people after the shares fiasco, and now the line rental increase. But as we know, the Irish people don't like hassle, and so are willing to stay with eircom, because in their eyes, it's less hassle to have just one bill. Remove that as a factor, and I believe thousands, if not hundreds of thousands of homes will switch.

I beleive the ultimate goal is create the competition at the customer end. Customers don't care where their money ends up, so long as they're getting the best deal. Whether their line rental goes to their provider through LLU, or ulitmately ends up with eircom doesn't really matter, the competition they will be creating is the same.

My 2c.

machalla

I can't disagree with any of that insofar as single billing will be a very good thing (and should have been a very good thing this time last year in fact). What concerns me is who will bear this cost to change a customer over from Eircom to another provider (or from provider to provider).

Imagine the sales pitch from now on from Eircon, "if you switch to another provider you immediately lose €24" (or €10 if Comwreck don't back down as usual) even if the calls are cheaper.

I presume this is a one time charge when a customer switches and will be on their first bill? It seems crazy that Eircom make money from customers switching away from Eircom (short term anyway).

My understanding of all this is I suspect limited as it doesn't seem to make sense to me. Any further explanation would be good.

seamus

Ah, I actually missed that, I only glossed over, thought it was referred to wholesale rental

I would assume that all the operators would absorb that themselves. Certainly passing it directly to the customer isn't exactly doing their damndest to get them to switch.

Cuauhtemoc

Would that charge be there in reverse as well?
ie changing from esat to eircom??

tomk

If machalla doesn't mind, I'd like to rephrase his original question, as nobody has actually answered it yet, and I was wondering what's behind this as well:

Why are €ircon allowed to charge competitors who win customers from them?!

If I decide to change milkman, my new milkman does not have to pay my old milkman for the privilege of supplying me......!

Moriarty

I haven't looked into it, but it's presumeably an 'administrative' charge from eircom wholesale. You can read what you like into that.

shoegirl

Actually according to the comreg document the charge is for automated switching.
€ircom had priced the 24 euro charge for paper based switching.

The reason eircom have a right to do this is because at the moment they are responsible for installing the line, maintenance and granting numbers. Hopefully it will not be long before other operators will be able to take over these functions too.

Its not just line rental, its about internet services, call answering, call maintenance services, etc. When customers see these services available they will switch in greater numbers. What pisses me off most about CPS is that at the end of the day the saving is piddling compared to the huge cost of rental from eircom.

query

Shoegirl, you're misinterpreting things. Eircom will still do the line install, maintenance, number etc - it's just the other operator will pay for that at a wholesale level rather than the customer paying at a retail level.