Eircom Expands Broadband Offer; May Take Up 3G Licence

by Jason Gorringe, Tax-News.com, London

21 June 2005

Irish telecoms operator Eircom launched a new 'sometimes on' broadband product last week, but it was slammed by lobby group IrelandOffline as a backwards step.

The "Eircom Broadband Time" service is aimed at dial-up users at EUR24.99 per month for 20 hours usage, although it will be available for EUR19.99 per month for first time customers who sign up to a six month contract between July and September. Eircom said that customers would be charged EUR0.04 per minute for additional usage after the 20-hour allowance. However, Eircom's entry level residential broadband service, which has no time restriction, will sell for just EUR29.99 per month for customers that sign up between July and September.

Ireland Offline chairman Damien Mulley said that the time-based product from Eircom has "switched the clock back for internet users, and will do nothing but increase people's fear using broadband instead of encouraging them."

Eircom replies that the service is not aimed at existing broadband customers seeking a lower-priced option. "Our research indicates that there is a demand for a more flexible entry level broadband product," said Eircom's commercial director, David McRedmond. "This is the fifth major initiative Eircom has announced on Broadband in the past seven months, keeping our commitment of making broadband available to as many people as possible, as quickly as possible and as affordably as possible," added Redmond.

Earlier this year the company announced that it was extending broadband rollout to 200 more exchanges in Ireland and it also set a new target of 500,000 high-speed Internet users by the end of December 2007.

Eircom is also believed to have made a bid for Ireland's remaining 3G licence last week. The only "A" licence was bought by Hutchison 3G Ireland in 2001, while two"B" licences were sold to Vodafone and O2 at a cost of EUR115 million each for a 15-year period. The third "B" licence was not taken up at the time, and is only now being re-offered.

Communications regulator ComReg confirmed it had received an expression of interest in the remaining "B" licence and has invited expressions of interest from other applicants. Multiple applications will be compared by ComReg, although the criteria are none too clear; the 3G spectrum access fee will be EUR114.3 million, with an annual spectrum fee of EUR2.2 million and an administrative fee of up to EUR300,000. If Eircom wins the licence, it will be required to launch its services by 30 April 2007, with 33 percent demographic coverage by the end of October 2009.

Currently only Vodaphone provides a 3G service in Ireland, although mobile network operator Three Ireland is expected to launch its 3G service in July. O2 has yet to offer 3G service to its customers. Three Ireland has been coy about the service it will launch, perhaps in order to avoid being undercut by its competitors.

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