Regulations 'disincentive to investment' says Eircom chief

dahamsta

Irish Independent (registration required)

The regulatory regime imposed on Eircom by the Office of the Director of Telecommunications Regulation (ODTR) is a disincentive to investment in the network, according to Philip Nolan, chief executive of Eircom.

Mr Nolan said that Eircom increased its network assets by €180m last year, but the company does not benefit from the extra volumes of calls it generated. He emphasised that fixed line businesses internationally are under pressure and a regulatory regime focused on the health of the sector is required, rather than an aggressive approach to telecoms regulation.

Mr Nolan criticised the price cap imposed by the ODTR on Eircom, which restricts its ability to grow revenues.

"On the retail side of the business, we don't need a price cap," he said.

He referred to the fact that while Eircom has 80pc of revenues generated in the country from fixed line calls, it only has 40pc of the revenues generated by voice calls.

The other 60pc goes to the mobile operators and Eircom's fixed line competitors.

Referring to the price cap placed on Eircom fixed line charges but not on mobile operators, Mr Nolan said: "We have 40pc of the revenues in the voice market but 100pc of the regulation."

[...]

Hey Phil? Doc? Nice to see you twisting the facts again dude. Do you talk to your mother with that mouth?

Great that the Independent is first to pick up such a killer story, eh? The Good Sir Knight has been busy.

adam

Dangger

Lets put things in perspective:

From The Irish Times 2/9/02

"Eircom recorded a profit of €12.8 million from its leased line business in the 12 months to March 2002, representing a fall of almost €16 million on the previous year.

Hardly the results of ADSL as ADSL was not introduced until May 2002. People must be getting the message about over pricing and slow roll outs.

Eircom managed to make a profit from its Internet call business in the year to March 2002, posting returns of €2.1 million on turnover of €23.2 million.

Eircom's Internet unit, Indigo, posted revenues of €8.2 million in year to March 2002, up from €6.15 million in the previous year

Well per minute charging is still generating them guaranteed MOOLA by the lorry load. Is it any wonder with all the other units haemorrhaging money they have fought tooth and nail to prevent flat rate Internet access?

Story up on IOFFL site

ednwireland

lets be honest eircom prices are what they are caos o'reilly's consortium borrowed loads of money to buy the company and now have to meet the debt repayements fromm the turnover. the only disincentive for investment is the one that the government allowed this situation to occur in the first place!
I honestly don't expect ay improvemt for probably 5 years unless the gov. steps in and takes over eircom 'in the national interest' except they won't cos they screwed up in the first place and not one of them has the b*lls to actually do ANYTHING about ANYTHING and that is the problem as long as there is enough of an economy that most people are reasonably happy they will not do anything.

I waiting for the next spending spree before the next election until then my time is better spent growing my own vegetables cos i can't afford them in the shops

Kevok

The other 60pc goes to the mobile operators and Eircom's fixed line competitors.

Erm, does this mean that if the price cap was removed Eircom would increase the cost per minute of making voice calls to be inline with mobile phone operators?

When 3G phones become available and the cost of going online with them is 7cent per minute, i take it we can expect Eircom to increase their internet charges to follow suit

nahdoic

Referring to the price cap placed on Eircom fixed line charges but not on mobile operators, Mr Nolan said: "We have 40pc of the revenues in the voice market but 100pc of the regulation."

is this guy for real? the mobile and fixed line market suddenly became the same thing?

the mobile market has 100% competition. while eircom's fixed line market has 0% competition, cos they own the whole friekin' lot. it's what's called a M-O-N-O-P-O-L-Y and has to be regulated properly or it can abuse its power. Phil should be counting his lucky stars eircom isn't regulated properly by the government and ODTR instead of whinging about the current ludicriously relaxed regulation that is in place.

gimme a break.

nahdoic

OK. Everyone, nice 'n' loud, altogether now, holding hands:

"one, two , three ... awwwww. poooor eircom."

you know I think the fact that we have the ability to make a voice call in this country and not let eircom see one damn cent of it is a disgrace. shouldn't eircom own our rights to speak? that way they could make lotsa more money, and be 'incentived' to invest in their own network.

just remember, the next time you pick up your mobile to make a mobile to mobile call you're 'disincentiving' eircom to develop their own network. what are all you bad, bad, bad eircom customers thinking? for the sake of eircom, let's all throw our mobiles away. they're the work of the devil. let your soul be cleansed of impure thoughts like "competition" and "regulation". Evil one be gonehh!

(pah I was getting lots of work done this morning before I saw that article ... )

seamus

FS.....since when have Landline and Mobile stats ever been lumped together?! Apart from the fact that we use them to make calls, the circumstances are totally different.

"We have 40pc of the revenues in the voice market but 100pc of the regulation."

Hmmm....correct me if I'm wrong, but all Mobile operators are subject to just the same regulations as eircom. It's just that they are obeying the regulations and acting competitively! (For the most part).

I wonder how much of that 60pc of voice calls revenue is creamed off into eircom's coffers from Mobile -> Landline calls? Afaik, they have a deal with Vodafone (at least) and so are making something out of these calls.

Also, I'm quite curious as to "increased its network assets by €180m last year, but the company does not benefit from the extra volumes of calls it generated." - If they were a mobile company, they have 100% coverage and 95% penetration. How does increasing their network assets increase call volumes? You can't say "We have more network! Make more calls!".

Lemming

The only people "disincentived" in investing are Eircom, but since they own pretty much everything that's fixed they need to maintain their network.

Everyone else will see incentive since they may actually be able to make some profit without having to give it all to EirComa :rolleyes:

DeVore

<snip dumb sh\t about mobile operators>

Shouldnt have flogged off Eircell to Vodafone then should they.

Take it eircom. We hate you.

DeV.

dahamsta

Take it eircom. We hate you.

It's funny because it's true.

adam