Comment: High customer spend can be attributed to usage patterns, not overpricing.
We all know how important telecommunications has become in underpinning a country's economic success. The penetration of various telecom services is regularly used as a barometer of how advanced we are as a State and our ability to attract inward investment.
Today, Ireland has one of the most vibrant and successful mobile phone markets in the EU thanks to a sustained period of investment and innovation. Irish consumers are amongst the highest users of mobile services in Europe.
They enjoy one of the highest standards of service along with prices, which are below the average in Europe.
On Monday of this week, O2 published figures for its businesses in Ireland, Britain and Germany. These figures show that on average, O2's Irish customers spend more on mobile services than their counterparts in Britain and Germany.
Some media commentators have attributed this to higher mobile prices in Ireland. However, based on the facts, this is untrue. O2 Ireland's customers spend 89 per cent more time on their mobiles than O2 customers in Germany and 49 per cent more than O2 customers in Britain. This is based on the fact that the average number of minutes per month we spend talking on our mobiles in Ireland is 215, compared with 114 in Germany and 144 in the UK. The average monthly spend by our customers in Ireland is €50, in Germany it is €29 and in the UK it is €34.
When you calculate how much our customers spend per month on the basis of how much they use their mobiles, the figures demonstrate that, because Irish customers use their mobiles more, they spend more.
In the UK, our customers who talk 49 per cent less on their mobile, spend 32 per cent less per month and our German customers, who talk 89 per cent less on their mobiles, spend 42 per cent less per month.
The average spend per customer in Ireland is driven by a number of factors: more time spent on the phone; higher disposable income driven by our economic success; and a young population which has decided to make the mobile phone an integral part of their everyday lives.
It has also been asserted that mobile companies in Ireland are keeping the price of mobile services artificially high. Some have even gone so far as to say that O2 Ireland and its biggest rival Vodafone, are engaged in price fixing in this market. I refute these assertions. In fact, these issues were tested and rejected by the independent Electronic Communications Appeal Panel (Ecap) in December 2005.
Our contention has always been that ComReg's decision that O2 and Vodafone were jointly dominant in the Irish mobile market was based on flawed economic analysis and that Ireland is a highly competitive market.
This can be illustrated by the fact that Ireland now has five licensed mobile network operators for a population of just over four million people - although only four are up and running. Compare this with Germany, one of the largest markets in Europe, which has four operators for a population of more than 80 million people.
Price fixing is illegal and something we would never engage in. We run our business independently of our competitors and have done so in a way that has seen our market share increase to nearly 40 per cent.
The fact is that 76 per cent of Irish mobile customers are paying the sixth lowest prices out of 19 European countries. Unlike other utilities in Ireland, since 2000, mobile phone charges have decreased by over 40 per cent.
As a result, Irish customers are paying below the EU average for their mobile phone services.
So we have one of the best invested mobile markets in Europe and below average EU prices. I think this is a very strong achievement for a market of our size.
We believe in dealing with our customers and the media in an open and transparent way. That is why, five years ago, O2 was the first mobile company in Ireland to voluntarily give detailed breakdowns and analysis of our pricing, our minutes of use, our average revenue per users and comparisons with our operations in Britain and Germany. Others have since followed this approach.
O2 Ireland has played its part in ensuring that Ireland continues to benefit from a well-invested mobile infrastructure at the leading edge. Over the past eight years, we have invested over €1.2 billion in our network to ensure that today's 1.6 million O2 customers enjoy a level of service that can compete with the best in the world. And we continue to invest at a rate of €4 million every week in maintaining, expanding and upgrading our network.
Irish people have responded very positively to the investment in mobile in Ireland. Its universal availability, value for money, convenience and ease of use, has seen Irish people take to mobile usage in a way that would have seemed unimaginable 10 years ago. So much so that mobile penetration has reached 100 per cent in Ireland and ComReg has estimated that 24 per cent of households in Ireland are now "mobile only", with no fixed-line telephone service.
Unlike some other critical infrastructures such as transport and broadband, we have a mobile sector which everybody is benefiting from.
O2 Ireland will continue to deliver investment and value for our customers and maintain Ireland's leadership position in mobile technology.
Danuta Gray is chief executive, O2 Ireland.
