The chief executive of the telecommunications company SMART Telecom, Oisin Fanning is to tell an Oireachtas Committee that Eircom is taking huge profits, cash flow and paying massive dividends to its shareholders out of the pockets of Irish consumers and businesses.
Mr Fanning said it was a fact that six years after deregulation was introduced no other telecom operator is achieving profitability and many have been driven out of business.
The chief executive said the current regulatory rules leave the door wide open for further increases in monopoly services such as line rental which Eircom alone supplies to the market. Eircom has applied to the communications regulator for a third successive increase in its line rental charges in the past year .
The chairman of the Consumers Association Dermot Jewell said Eircom's land rental charges were crippling the less well off by being way above the European average price. Jewell told the Oireachtas Joint Committee on Communications, Marine and Natural Resourcees that the average European line rental cost was about €16 whereas Eircom is charging €22.49 a month.
Jewell also said he believed that the telecommunications regulator ComReg has missed the point when it looked into these prices. He also said a combination of increases already given to Eircom and the new increase it has requested would give the company €90m a year more in revenue. Jewell said line rental was the only element of the Eircom services package that had never gone down and consumers were now finding it impossible to budget for it.
The financial director of Smart Telecom Brian Timmons told the committee chairman Noel O'Flynn he believed it was correct to say that Eircom was in fact seeking revenue increases in preparation for a public flotation later in the year. He said he believed of a timing of any such share offer to the public would be dictated by market forces.
