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Esat Digifone has been designated with Significant Market Power (SMP) in the national market for interconnection by the ODTR.
Digifone has been given the new designation by the Office of the Director of Telecommunications Regulations (ODTR) because it had a 28 percent market share in that sector in 2000. Operators in the markets prescribed by the EU interconnection regulations must have a 25 percent market share to be designated.
Interconnection rates, and the interconnection market, refer to the cost incurred by a network operator, mobile or fixed line, when transferring a call from one network to another.
According to the ODTR, operators with SMP face additional obligations aimed, inter alia, at controlling the exercise of their market power. The principle obligations placed on operators with SMP are to ensure that charges for access to another network are "cost-oriented" and for fixed networks to provide non-discriminatory access to the network.
According to a spokesperson for Esat Digifone, its new designation did not come as a surprise to the company. The spokesperson said that Digifone was well aware of the obligations that came with the new designation. "We are already below the EU average for interconnect charges," commented the spokesperson.
Eircom's designation in the national interconnection market has been removed, because its market share has fallen below 25 percent. However, according to the ODTR, the change does not affect the existing obligations imposed on Eircom, including its obligations under the interconnection regulations. The ODTR said this was because the company has been designated as having SMP in the markets for leased lines, and the market for fixed network and services.
Despite the change in Eircom's official SMP designation, in the mobile public telephony market, Eircell and Esat Digifone remain designated.
The designations are based on the results of a review based on a questionnaire sent to all licensed operators which covered the period 01 January 2000, to 31 December 2000. The last review of designations was in 1999.
According to the ODTR's figures, in 2000 Eircom had SMP in the retail fixed market with 89 percent market share, and SMP in the network fixed market with 92 percent market share. It also had SMP in leased lines with 96 percent.
In the mobile market, Eircell had 62 percent share and Esat Digifone had 38 percent. In the interconnection market, Eircell had 46 percent market share and Digifone had 28 percent.
Responding to the figures, Esat's director of regulatory affairs, David Taylor, told ElectricNews.Net that the development of effective competition in the fixed and leased lines markets was "going at a very slow pace." He added, "The ODTR must take action against Eircom if effective competition is going to develop," remarked Taylor.
"The new entrants in the fixed market have 20 percent of the market. When benchmarked against European countries this is a very high figure for a country that liberalised its telecoms market only three years ago," countered Brighid Smyth, public affairs manager, ODTR. "We have acknowledged the poor performance to date in the delivery by Eircom of leased lines to other operators. However, we also have the most stringent penalty regime in Europe to incentive Eircom to deliver leased lines in a timely fashion."
The ODTR also said that Irish mobile interconnect rates when benchmarked against EU incumbents are mid-table. It added that it is currently developing its work programme to review mobile interconnection rates.
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