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USO compensation delay; is it costing us?

  • #1
    Registered Users Posts: 1,494 ✭✭✭ clohamon

    Eoin Burke-Kennedy of the Irish Times* did a tot on the amounts Eir thinks it’s now owed in its role as Universal Service Provider in all the years since 2009. It’s either €51 million or €57 million depending on whether the 2009/2010 period is included. (ComReg claimed the amount in 2009/2010 was not an unreasonable burden.)

    But it’s not clear if interest is due where ComReg delays in facilitating repayment to Eir of what they are owed. And if so, what would the interest rate be ?

    Case 1: 10.21% - Eir's ‘Weighted Average Cost of Capital' agreed by ComReg back in 2008. That would mean that a further €14.03 million in interest is owed giving a grand total of €71.09 million

    Case 2: 15.05% - Eir’s own ‘reality’ cost of capital in 2010. In this second case the interest would be €22.02 million and the total rises to €79.08 million.

    Who pays?
    The consumer pays ultimately, but ComReg were supposed to introduce an industry compensation fund so that retailers such as Vodafone would accept their proportion of the cost of USO. (to pass on to us)

    If interest is payable, and at the rates indicated above, it would be a good idea if ComReg would hurry up and get the fund in place. And it would be a very bad idea to leave this amount overhanging negotiations on the NBP.

    *or google "ComReg under fire for failing to rule on Eir’s €50m USO claim"