Eir is headed for a new broadband clash with Ireland’s telecoms regulator over “unjustified” charges in rural Ireland.
In her first major interview since becoming chief executive, Carolan Lennon said that Eir may challenge price reductions set to be imposed by ComReg on Eir’s rural broadband service.
“We think it’s way too early for this,” she told the Sunday Independent. “If we need to challenge it, we will.”
A spokesman for ComReg said that “substantial” changes to key Eir rural wholesale broadband prices were on the way. This includes Eir’s current €272 wholesale charge to connect rural homes to its network.
“We don’t like that charge and we don’t think it’s justified,” said the ComReg spokesman.
“We will certainly be proposing quite substantial changes to Eir’s ability to choose what the connection charge should be.”
Mainstream rival operators have long complained about the charge, saying it locks them out of offering high-speed services to rural customers.
“To a large extent, we are relying on ComReg delivering,” said one senior executive in a rival telecoms firm hoping to offer broadband services on Eir’s network.
However, Eir’s Lennon said that the company’s wholesale charges are substantially less than the actual cost to Eir of connecting rural homes.
“If you look at the UK’s rural connection charges, you’re talking about over £500 to connect a home, while in some European rural areas, it can be a couple of thousand of euros,” she said.
“It’s only four years since we started rolling out fibre and already we’re talking about driving the prices down.
“The regulator has a job to make the environment right for capital investment. For that, you need a level of predictability to get a return. If we need to challenge this, we will.”
Eir is also protesting against its ‘universal service obligation’, a legal tenet which requires it to keep funding remote rural telephone poles.
Lennon’s remarks come as Eir prepares an unprecedented €1bn national broadband upgrade plan that will upscale every city-based and urban home from copper to high speed fibre.
The 1.4 million-home plan, which is a direct assault on Virgin’s cable domination in Irish cities, will start next year and is the first major move by French billionaire Xavier Niel, whose NJJ is now the majority shareholder in Eir.