EUR 5,851,118.39 per month (excluding VAT)

Ripwave

I asked the Department of Social and Family Affairs for some information on the number of people receiving a free telephone under various Social Welfare schemes. The response I got was a model of "open government", and includes some interesting information about some flexibility recently introduced into the scheme that would (in theory) allow 3rd party providers to bid for the service.

I also note that "equipment charges" aka "comfort rental" is also covered, which I haven't included in the subject line .

At the end of August 2003 there were 286,679 customers in receipt of a Telephone Allowance from this Department.

Up to 2 October 2003, the Department of Social & Family Affairs paid {eircom} the standard retail rate plus VAT for the Telephone Allowance provided to eligible social welfare customers. The allowance covered basic line rental/equipment charges (if applicable) and up to EUR 2.42 (plus VAT) worth of calls in each two-monthly billing period.

To facilitate liberalisation of the telecommunications market and other licensed operators as well as {eircom} to participate in the Telephone Allowance Scheme, the Department decided to roll up the allowance into a single cash credit on the customer's bill not attributable to any particular component of the bill.

From 3 October, 2003 the Department and {eircom} have agreed a new scheme for {eircom} customers in receipt of the social welfare Telephone Allowance. This scheme is known as the {eircom} social benefit scheme.

Under the scheme the customer is charged the equivalent of EUR 20.41 per month (EUR 24.70 including Vat) for a package which gives them the full benefit of the existing social welfare
Telephone Allowance (EUR 21.85 monthly excluding VAT, equivalent to EUR 26.44 including VAT), and an extra call allowance of up to EUR 1.00 per month (excluding Vat) (EUR 1.21 including Vat). The Department in turn is charged EUR 20.41 per customer per month, (EUR 24.70 including Vat).

The Department is willing to provide the same allowance (EUR20.41 per month plus VAT) through other licensed land-line service operators of the customers' choice, using the Wholesale Line Rental agreement structure.

There is no formal contract in place between the Department and {eircom} as such in relation to the telephone allowance scheme. Nonetheless the scheme administration and invoicing structures are long-established and stable. The {eircom} social benefit scheme now in place was agreed by negotiation in 2003 between the Department and {eircom} and approved by the telecommunications regulatory authority, ComReg.

dahamsta

That's a big feckin lever if ever I saw one. Plus of course the gov.ie communications requirements must cost a fair whack. All those phones and faxes, leased lines, etc, etc. Nice bit of research there Ripwave.

adam

spongebob

Nice one Ripwave

I had rooted thru the Dail website for an answer to this question of government subsidies for Eircom that are not put out to competitive tender only last month .........and found nothing.

At €18.60 a month standard line rental (ex vat) I make this 315,000 lines. The department only pays subsidies on analogue lines , of which there are 1.6million.

The government therefore subsidises Eircom by paying the rental on 20% of ALL Eircom lines . As these are by far the most expensive in Europe it means that the Irish Taxpayer is being gouged rotten .

Where is the Comptroller and Auditor genergal when you need him

M

Ripwave

Originally posted by Muck
At €18.60 a month standard line rental (ex vat) I make this 315,000 lines.

The number of people in the scheme in August was 286,679 - the figure in the subject line is what I got when I multipled that by the value of the benefit (€20.41 plus VAT- it includes a nominal call alowance - a 5 minute call to a mobile number, for example). But we won't quibble over 30,000 odd lines.

The department only pays subsidies on analogue lines , of which there are 1.6million.

The government therefore subsidises Eircom by paying the rental on 20% of ALL Eircom lines . As these are by far the most expensive in Europe it means that the Irish Taxpayer is being gouged rotten.

Nothing new there, I'm afraid

Ripwave

If you were entitled to a free phone, would you rather get a phoneline from eircom, with €2 of free calls per month, or a mobile, with say €10 of free calls per month?

Do you think a company could supply a mobile phone for say €100/year, leaving €150 or so for bulk minutes and administration and profit? It sounds like there's enough money involved to make this practical and profitable. Relatively little infrastructure required, and you could offer the option to everyone in the country, because the coverage is already there, but the cost of calling mobiles would make it unattractive for many people. (And it's no good if you want to go online, but let's set that aside for the moment).

What about NTL - do you think a contract for X million to provide telephone services to SW recipients in a specific area would be enough to get them to upgrade the cable there? (providing additional benefits to the recipients, perhaps).

If you think of it as €70 million of seed money to kick start alternative telecommunications services, there must be some even better alternatives out there.

spongebob

You could go mobile and let those without a signal use a LLU line with single billing through a mobile operator

Alternatively you could let a landline operator take the whole contract using single billing and llu and provide the govermnent with a competitive price.

As it stands it is an unfair subsidy to Eirocm and a horrendous waste of public money. I hope that someone brings it to the attention of the EU, I thought all public tenders over €150k had to be advertised in the Community Journal ?

M

Ripwave

Originally posted by Muck
I thought all public tenders over €150k had to be advertised in the Community Journal ?

Technically, it's not a tender. It's a benefit to end users, and the Department just pays the bill on behalf of the end user. Until now, you couldn't get it if you didn't already have a phone line, and as nobody has a non-eircom phone line, it just happened that all the money went to eircom. I don't know what happened to the small call allowance if you had an non-eircom CPS contract, but it's likely that nobody ever made an issue of it, because that element of the benefit was too small to chase.

Actually, if single billing is ever introduced (with the 8% discount for CPS providers), then ordinary CPS providers might be best placed to take advantage of this, though the margins are probably too slim to provide a "tipping point".

The real question is whether €250 per house per year is enough to fund an alternative infrastructure. Back in the old days when NTL actually cabled whole estates, how much did it cost per house?