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Competition dearth in Irish telco market
Tuesday, September 24 2002
by Ciaran Buckley


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.