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Eircom facing increased competition: ComReg
22-06-2005
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Eircom's market is disappearing rapidly as the fixed-line sector shrinks and the telecoms incumbent faces increased competition from low-cost competitors.
That's according to ComReg's Quarterly Report, which surveys the Irish communications market. The report shows that fixed-line revenues constituted 49 percent of the total electronic communications market at the end of March, while the mobile phone market made up 47 percent of revenues. Back in the first quarter of 2003, fixed-line revenues constituted 60 percent of the Irish market, while the mobile market made up only 36 percent.
The figures underline the business risks to Eircom of continuing to rely on its fixed line business. Elsewhere, Eircom is also losing fixed-line business to carrier pre-select (CPS) operators, who sell phone services that piggyback on Eircom's network.
"There has been a rapid increase in wholesale line rental since its introduction in June 2004," the report said. "This clearly illustrates the preference for single-billing from a consumer perspective."
ComReg estimated that the number of CPS lines have increased from under 200,000 in the first quarter of 2003, to 350,000 in the first quarter of this year. The report also cited another ComReg report which found that around 20 percent of consumers currently take a single-billing offering from an operator other than Eircom.
But even though consumers can now avail of single billing, the survey shows that Ireland has the highest line rental rates in the EU. The report attributed this to the low population density of Ireland, which makes it more expensive to provide and maintain phone lines.
Eircom seems unlikely to be rescued by the growing market for DSL broadband, because Ireland's broadband penetration rate is one of the lowest in Europe. This has improved over the past two years and the rate of penetration is currently at 34 per 1,000 inhabitants, up from 8 per 1,000 in 2003.
"We are encouraged that, despite the low comparative penetration by European standards, consumers are beginning to migrate to broadband from narrowband, and we expect this trend to continue and accelerate as service providers offer more competitive and innovative broadband services. Overall revenues continue to grow in the telecommunications sector, evidence of strong consumer and business demand for telecoms services," said Isolde Goggin, chairperson of ComReg, in an e-mail to ElectricNews.Net.
The survey also cites Central Statistics Office records, which estimates that 38.2 percent of the population now has internet access, an increase of 4.7 percent from 2003. Over the same period, PC penetration increased by 4 percent to 46.2 percent.
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