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The lack of competition in the Irish telecoms market has kept the price of broadband, mobile and corporate communication services high, according to IDC.
An IDC report says 38 percent of large Irish organisations (over 500 employees) are expecting to pay less for voice telephony in 2002 than they did in 2001. However, almost as many Irish firms (31 percent) believe their overall telecoms expenditure will be higher this year compared to last year, with only 23 percent of organisations taking the opposite view.
Meanwhile, the economic downturn has had very little effect on business communications costs, IDC said, with only 6 percent of organisations expecting to spend less than originally budgeted on telecom costs. Twenty-seven percent of Irish companies will spend more than their original budget, and more than 44 percent of large companies in the Republic, or those employing more than 500 people, will overspend their telecoms budget.
IDC consultant John Gilsenan said that the overspending by many organisations suggested that prices were not falling as quickly as expected. "This underlines the low level of competitive pressures in the Irish market," Gilsenan added.
IDC also found that companies expected their voice call costs to decrease, while they expected their data communications costs to increase. The survey found that on average 46 percent of companies' communications budgets were spent on voice telephony.
With regard to the mobile sector, the IDC report said that the lack of competition, and consequent high prices, are also part of the reason why average revenue per user (ARPU) in Ireland is among the highest in Europe. However, the report did say that over the next few years prices should fall as user penetration increases further. Mobile data services will be a key driver of growth, the report noted.
Finally, the IDC research admitted that a great deal has been written about "the dearth of broadband access" in the Republic. "Now that DSL offerings have been launched by both Eircom and Esat BT, it remains to be seen how quickly it will be adopted," IDC wrote.
Confirming what many industry groups and consumer organisations claim to be the case, the US-based research company claimed that take-up of DSL will be slow because of the high price for those users who should benefit most from the offering -- small businesses and home users.
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