ESAT Telecom is to lobby the Government to open the telecommunications market to full competition immediately. Udder an EU derogation Telecom Eireann has a monopoly in voice telephony (residential phones) until 2000.
Meanwhile Esat has announced that it will begin building an alternative telephone network for business users from today. The first phase will be built in the Dublin 1, 2 and 4 districts and should be operational within three months. It will also include public payphones, which Esat has promised will offer cheaper calls.
Esat's chairman, Mr Denis O'Brien, said yesterday that there was no reason why Telecom, which "now has annual revenues of Pounds 300 million", should be protected from full competition any longer. Esat's legal adviser, Mr Jarlath Burke, said the new Government could drop the EU derogation immediately if it wished.
"We will be making the case to the Minister for Public Enterprise, Ms O'Rourke, to reverse this decision," Mr O'Brien said.
Until now companies had to lease lines from Telecom to carry telephone calls from its customers to its own network. Mr O'Brien said this often entailed a delay of three to four months, and the cost of leased lines was far too high. Despite this, the leased lines market had grown by 40 per cent last year and was worth Pounds 60 million, according to Esat.
Mr O'Brien said the new network would bring substantial benefits to corporate customers. It also means that Esat will not be so dependent on leased lines. Mr O'Brien said it will result in savings in multiples of millions of pounds" for Esat.
Esat says the network will represent a high-speed broad-band service which will be able to carry a wide range of applications, including Internet services and video conferencing. The network is part of a phased roll-out which could eventually entail an investment of up to Pounds 100 million.
Recently, Esat joined forces with CIE to lay a fibre-optic telecommunications network along its railway lines.
Mr O'Brien said Esat would be "knocking on everyone's door" where it lays the network, offering them a very competitive package to move on to the network. Existing customers will also use the network.
He claimed Esat has 18 per cent of companies spending over Pounds 200 per month and the company would continue targeting large corporate users, as well as those spending more than Pounds 50 per month on calls.
He said Esat would be well placed to tackle the residential market, when it is liberated, but stressed that the Government should open it to competition now. Residential users are still paying far too much, he said.
He said the new network would open up endless possibilities for users and added that there was nothing to stop Esat installing phone kiosks, along the routes subject to planning permission. He would not specify how much calls from such kiosks would cost, but pledged they would be cheaper than Telecom's tariffs.
The first phase will be built in the shape of a ring starting from Esat's national switch in Dublin's Fenian Street. It will serve the business districts of Dublin city centre. The company is also expected to target lucrative business in the International Financial Services Centre.
Esat said it had received approval from all relevant authorities including Dublin Corporation to start laying cable. Most of the work will be carried out at night to avoid traffic disruption.
Meanwhile, Mr O'Brien would not comment on reports that Esat was in negotiations to buy Indigo, the Internet service provider. He said Esat would be a big provider of Internet services, but whether this was on its own or through partnerships was still under discussion. He said Esat was having talks with "three or four" Internet service providers.
