EIRCOM’S SHARE of Government telecoms contracts is to be further eroded with the establishment of a panel of five preferred telecoms companies that will bid for State contracts.

Under a tender competition being run by the Department of Finance, applicants have to submit their tenders before next Tuesday, December 23rd.

Documents published on the Government’s e-tenders website put the total value of the contracts over the next four years at €50 million to €100 million.

There will not be a single winner of the contract, which is to provide fixed voice and voice-over-IP telephone services to over 5,000 non-commercial public sector bodies including central government, local authorities, the health sector, the justice sector, the education sector, the Defence Forces and non-commercial semi-State agencies.

In accordance with EU framework tendering rules, a panel of approved bidders will be put in place. These companies will have supplied pricing details and agreed to legal terms.

When a State body requires telecom services it can then ask the pre-approved telcos to submit bids.

Framework agreements are designed to ensure State bodies are getting current market prices for services rather than being tied into multi-year contracts at fixed prices. Bodies covered by a framework are also free to get tenders from the open market, but companies within the framework agreement are likely to offer better rates in a bid to win a greater volume of the business.

Eircom has a market share of 67 per cent for fixed-line telephone services, but industry sources say this is much higher in the Government sector. It had a contract for the provision of fixed-line services to Government which expired last year.

Since last year Vodafone has been providing a fixed to mobile service to State bodies which routes calls to mobile phones over its network at a lower cost than for using a fixed network.

In 2002 other telcos lobbied the Government strongly following the decision to award an exclusive contract to the former State telco for fixed-line and data services, a contract called the Government VPN, which ran until 2005.