EIRCOM HAS been ordered to cut the price it charges other operators to provide broadband services over its network by 65 per cent.
ComReg, the telecoms regulator, yesterday said the monthly price for a specific regulated product - local loop unbundling (LLU) line-share - should be reduced from €8.41 a month to €2.94.
LLU refers to the process by which other operators can take control of Eircom-owned phone lines into customer homes and premises. LLU line-share allows these operators to offer customers a broadband-only service, with Eircom retaining control of the voice portion of the line. These services use digital subscriber line (DSL) technology to achieve high speeds over standard copper phone lines.
During the consultation process ComReg found that there had been a 65 per cent increase in lineshare connections between December 2007 and April 2008, although it was starting at an extremely low base.
The existing price for line shares was set in 2001, before broadband was widely available in the Republic.
Although it is possible to get DSL broadband only from a service provider, this requires paying monthly line rental. ComReg felt this created an "anomaly" which could give rise to Eircom getting an "over recovery" of network costs from other operators.
Competitors welcomed the move by the regulator.
"BT welcomes this decision by ComReg to bring Eircom's wholesale prices for this service in line with the rest of Europe," said Chris Clark, chief executive of BT Ireland. "This is good for competition and innovation, and good for consumers."
John Doherty, chairman of ComReg, said the price reduction would have a positive effect on competition "in terms of price, quality and the choice available to residential and business consumers".
The price cut had been signalled during the consultation process ComReg carried out with the industry, according to Liam O'Halloran, chairman of Alto - the lobby group for alternative operators.
Mr O'Halloran said that previous price cuts around regulated products had resulted in increased activity by alternative operators. He highlighted the entry of 3PlayPlus to the LLU market late last year, Carphone Warehouse's subsidiary TalkTalk adding broadband to its existing telephone service and Smart Telecom's introduction of new products as positive signs.
"That activity is being driven by the business case being more predictable," said Mr O'Halloran.
