Changing to another telecoms provider could make considerable savings for money-strapped consumers, writes Caroline Madden. 

Irish consumers are being squeezed from all sides these days. The cost of living continues its relentless upward spiral, eating into whatever disposable income people have left over after making increasingly hefty mortgage repayments. It emerged this week that Dublin is now almost as expensive to live in as New York - even a trip to a barber in the capital costs an average of €24.

Unfortunately many consumers already feeling the pinch will soon find juggling their finances even trickier, as Eircom has announced that it will be pushing up its prices from July 30th. The dominant telecoms provider in the Irish market, Eircom estimates that the average customer bill will increase by roughly 3.6 per cent.

However, it could work out to be significantly more than this for some customers depending on their usage pattern, as the company's estimate is based on a selected basket of services.

Line rental alone is set to increase by almost 5 per cent to €25.36 a month, and local and national calls are also set to jump by close to 5 per cent as well.

Rather than just resign themselves to never going to the pub - or indeed the barber - again, Eircom customers should use the next few weeks before the price hikes kick in to check out the competition. They may well discover that by switching to another telecoms provider they could make considerable savings.

Iarla Flynn of Alto, which represents alternative telecoms operators in Ireland, strongly advocates shopping around for the best possible price.

"There is some great value and choice out there for consumers," he says. "The unfortunate thing is that a lot of people have never taken a serious look at the other options."

With a flood of new entrants to the telecoms market in recent years and a myriad of different tariffs, packages and deals being advertised, choosing the right home phone option can seem a bewildering task. However, the Commission for Communications Regulation (ComReg) has created a user-friendly cost comparison website - www.callcosts.ie - which makes shopping around for fixed line providers extremely straightforward.

It also allows consumers to compare the cost of combined services, such as bundled home phone and broadband packages, which are becoming increasingly popular.

The process of switching operator is also easy. Emer Kennedy of BT Ireland explains that consumers wishing to switch to them can do so over the phone (by means of third-party verification) or online. "It takes about two or three minutes to sign up," she says.

"If they're switching over both their broadband and their line rental, we transfer their broadband first and that takes up to 10 working days, and then we transfer their line rental, which takes 15 working days on top of that."

BT liaises with the previous provider, so that only one phone call is required by the customer. "I think a lot of people are surprised - they put it off but find that it wasn't that painful after all," Kennedy adds.

Despite the fact that shopping around and switching has never been easier, consumer inertia is still a big problem for telecoms companies in Ireland. "Once you have customers, they seem to stay, but winning new ones does seem to be quite a challenge," Flynn says.

Research recently commissioned by ComReg found that 34 per cent of fixed line customers surveyed had shopped around and compared prices between fixed line providers at least once. But are they actually making the leap? The ComReg survey doesn't reveal the exact numbers of those who decided to switch but, interestingly, it found that almost half of those who did move away from Eircom at some point had switched back.

The most common reason for returning to Eircom was poor customer services with the new provider. Another reason commonly cited by those surveyed was that an Eircom sales representative had encouraged them to switch back.

According to an Eircom spokesman, all telecoms companies must observe complex restrictions in relation to contacting former customers, but said that the company's win-back rate is nevertheless very high.

"People do leave, and they do look for other providers but I know a lot of people do come back to Eircom as well," he said. "We know that there are a lot of improvements to be made to our customer service - it's getting better but it's not where we want it to be. But . . . people feel that when you're with an operator that is bigger and more reliable and has a lot of staff, technicians and engineers, that if they have a problem they have a greater chance of getting it resolved."

The danger of straying away from the old reliable into unknown territory was highlighted graphically last year by the Smart Telecom debacle. Those who went out on a limb and signed up with Smart - at the time one of the largest and most ambitious alternative providers - got their fingers burned last October when their phone lines were unceremoniously cut off as a result of the company's dire financial circumstances.

Although many of these people are likely to crave security now, Flynn insists that Eircom is not the only reliable choice available in the telecoms space.

"There are plenty of operators out there who are very well established, who've been in the market for years and aren't going anywhere, who will give good value to people."

However, consumers who are toying with the idea of trying out an alternative operator should bear in mind that Eircom's impending line rental increases will affect most other fixed line providers in the market.

Alternative providers - such as BT - buy wholesale line services from Eircom at a discount of 10 per cent on the retail price.

Therefore, when Eircom's line rental prices rise by 4.9 per cent next month, this may spark a ripple effect throughout the market.

What is yet unknown is the extent to which operators will pass on the increase to their consumers.

According to Kennedy, BT is still in the process of reviewing Eircom's price increases and has not yet made a decision on its own pricing. "Ultimately we still want to be cheaper than Eircom in the marketplace."

Flynn says: "A key element of competition in the market is price competition, so if you simply have Eircom increasing their own price and the price for other operators, then consumers will have no alternative, no choice.

"We certainly urge ComReg to review the wholesale pricing and ensure that other operators can compete in price with Eircom."