Communications regulator ComReg has set a new rate which determines how much Eircom can earn from investing in its fixed-line telephone business. The figure is a factor in how much Eircom is allowed to charge consumers.
The new rate for Weighted Average Cost of Capital (WACC) is 10.21%, down from the previous 11.5%. ComReg said it was happy this would give Eircom an adequate rate of return.
ComReg said it was important that the rate was not set too high - which could result in higher prices for consumers - nor too low, as this could affect Eircom's willingness to invest in its network.
The regulator said it looked at other options such as splitting the WACC rate between different parts of the business, but decided not to do this in the absence of specific plans from Eircom about investment in 'next generation', or higher speed, networks.
ComReg said it could re-assess the decision in the light of 'any substantial new information'.
