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The Great eircom rip-off continues

I am just reading the comments of Phil Nolan, Eircom’s CEO to an Oireachtas (Parliament) subcommittee. Eircom is Ireland’s incumbent telco, and charges a ludicrous amount for its basic ADSL service. According to Nolan, the lack of uptake has nothing to do with the price – it’s just that the benefits haven’t been made apparent to the public, and that’s the government’s fault, of course -.

Nolan insists that the idea of making ADSL high speed Internet access available at EUR 25 per month is impossible, and that the service couldn’t possibly be provided at that price. He doesn’t bother accounting for how it is that you can get broadband in most other European countries for this price.

Nolan must know that wholesale ADSL, as eircom implements it, is a highly profitable business. It requires no net infrastructural investment (since the installation charge covers the cost of the head-end equipment, the customer pays for his/her own modem). The amount of bandwidth being allocated per customer is miniscule (about 11 Kbps).

True enough, it is not as profitable as eircom’s voice business, where markups on international calls typically run into hundreds or even thousands of percent. (I recently paid EUR 15 for a 15 minute telephone call to the US from an eircom payphone. The cost-of-sale to eircom for that call was probably less than about 60 cents, going by what other operators are charging for the same call. The rest was gross profit. Even from a home or office phone, the markups are are 300 percent or more.)

According to an Irish Times report on Wednesday, Nolan believes that ‘consumers have embraced mobile phones although they are relatively expensive to use’ and believes that they should do similarly with ADSL. What rock was Nolan hiding under during the late 1990’s? Surely the CEO of a telephone company knows that the reason mobile phones became so popular is because of the intensive efforts of the operators to make it as cheap as possible to own a phone?

At the same time, eircom are constantly jacking up the cost of getting any sort of phone service. The monthly rental is now 22.50, more than 50 percent more than it was five years ago. There is no rational reason for this high cost, given that most of the copper was installed 10 or 20 years ago and has long since paid for itself.

(Of course, you have to be paying this excessive rental before you can even apply for DSL service, so the real cost of having DSL in your home is more like 76.50/month, or over EUR 900/year.)

At these prices, eircom is begging for a competitor to come into the marketplace and offer an alternative ‘local loop’ to customers’ homes and businesses.

It’s not much of a secret that a number of parties in Dublin are now looking at the possibility of rewiring Ireland using modern technologies to provide better voice and data services than eircom at a “reasonable” price.

It won’t be hard to come up with a price that’s more reasonable than EUR 76.50/month.

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  1. Couldn’t agree more.

    I was in Kansas in 1999, in a small town 50 miles from the small city of Wichita. Everybody in the town had cable Internet for $30 a month (this included their normal cable service, and was about to be reduced).

    The problem is that it would now be very expensive for a new local loop provider to install copper or any other kind of physical connection, so eircom can charge what they like for that unless forced by ComReg to reduce prices.

    As noted at the time, Cablelink was sold by eircom for an inflated price, having been systematically left unusable for phone and datacomms. NTL would never have the cash to upgrade the network, so eircom got perhaps ?100m it didn’t deserve and ensured its main competitor for phone and data would be banjaxed well into this decade. Not saying they did this deliberately of course 😉

  2. This might be fair or it might’nt.I talk to my girlfriend from my house phone to her mobile for around 3/4 of an hour every few nights.I think for one call between 11.05 and 11.50 it cost about 9 euro’s.The total bill was about 180 euro’s.Also,to be on the internet for about an hour and a half most nights for the two months costs over 100 euro.Or am i talkin’ ********?

  3. The people who invested in Eircom knew they were investing in a sure fire monopoly, that couldn’t lose money. By some kind of manipulation, their choice to hang on to their investment was taken away from them, and the company sold to Tony O’ Reilly. His consortium has made so much money from the deal since they bought it, that already the profits have already paid the purchase price.

  4. The investors in Eircom were screwed, most un ashamedly, by the likes of Mary O’ Rourke, and whoever devised that the shares could be sold on without the consent of the shareholders. The floatation of Eircom shold have been the launch of a flagship, a model for all future floatations. Instead it was a disaster, that would discourage all potential investors against investing in state floatations for a very long time, for good even.

  5. The people who bought Eircom shares bought into a utility with a liense to print money. Little did they know the deviousness their govt. would engage in with private business to swindle them out of their investments.

  6. I work for a company called Cinergi Telecom. We can offer anyone calls up to 46% cheaper than Eircom. Even at that rate Cinergi are making profits addmittidly much more modest than Eircom. If Anyone wants to reduce their phone bill by nearly half then they can get in contact by email. There is not risk and no cost to you the consumer – only savings and that less money for Eircom.


  7. Hello to all,
    I also agree fully with the comments of how much we are being blatently ripped off on phone-calls.
    The monopoly, though, is breaking, and with the help of our company (Eurexcel), Irish people have now got a greater choice than ever to break away from paying extortionate amounts.
    Also, through joining me with our company, we can give you the opportunity to make continuous large amounts of income for yourself, through spreading the word and helping others to keep extra money in their pockets instead of giving it to money-grabbing companies.
    If you are interested in either, substantially reducing your phonecosts or making money by saving other people money or both, then get in touch and I will give you a presentation which I can guarantee will impress you.
    I can be contacted at any time on 087-1212430.
    All the best to you, and take my advice and make contact with me…

  8. I am getting some high billing from eircom and I use the internet, how much can I save with you.

    Tel: 045401213

    Phone anytime.


    James Conway


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