European Commission approves plan to cut Eircom access charges

19 Jun 2009

The European Commission (EC) has backed a proposal by the Irish telecoms regulator, the Commission for Communications Regulation (ComReg), to cut the prices levied by incumbent operator Eircom on competitors accessing the so-called ‘last mile’ of its network. The EC also backed ComReg’s plan to reduce the amount Eircom charges for transferring customers from one service to another. The European Union hopes the directive will boost inward investment in the Republic’s broadband market and boost competition. Commenting on the measure, EU Telecoms Commissioner Viviane Reding said: ‘Broadband competition in Ireland is currently being held up by the high access prices Eircom charges … This move will allow for greater flexibility and innovation in the provision of broadband internet services and ultimately lead to wider choice and lower prices for consumers.’

However, the EC’s decision comes at a bad time for Eircom which has been put up for sale by Eircom Holdings, formerly Babcock & Brown Capital (BCM). Earlier this week CommsUpdate reported that the trustees of the Eircom employees Share Ownership Trust (ESOT) have withheld a payment of EUR49.9 million (USD69.1 million) to members, to ‘preserve its options’ if it decides either to increase its stake in the telco or co-invest with a potential bidder. ESOT says the move is necessary for the trust ‘at this critical juncture and believes it is in the best interests of beneficiaries to do so.’ Former monopoly Eircom has received interest from a number of suitors including UK private equity group Permira, and Bahrain-based Viridian owner Arcapita, while the likes of CVC Capital Partners and Singapore Technologies Telemedia have also held talks with Eircom executives.

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