[Article by SBP] Eircom makes millions from hidden charges

damien

http://www.sundaybusinesspost.com/web/DocumentView/did-964082621-pageUrl--2FThe-Newspaper-2FSundays-Paper-2FNews.asp

Eircom is getting millions of euro in revenue annually from charges for services that customers do not use and from fees for equipment that is obsolete or non-existent. An investigation by The Sunday Business Post revealed various cases where customers have queried charges imposed by Eircom. In some instances, they received credits from the telco running into tens of thousands of euro. It has also emerged that several institutions in the public sector were incurring unnecessary charges for services and equipment, representing a waste of taxpayers' money.

Correspondence shows that customers experience great difficulty in obtaining a clear explanation about the equipment for which they were being charged. The vague category of ``equipment'' under which charges are imposed in bills sent to Eircom customers has been the focus of attention by customers and their advisers.

The issue is particularly significant for businesses and larger institutional customers. Bills and private Eircom documents seen by this newspaper reveal that customers are being charged for items including secretarial plinths, connecting apparatus and switches - many of which no longer exist, are obsolete or are not being used. Revenues from such charges are a significant source of funds for Eircom as they go straight onto the company's bottom-line profits.

Telecoms consultants have said that these needless charges are commonplace on the bills of customers across Eircom's client base. They said that this was adding millions of euro to the telco's revenues. According to Eircom's last accounts, the company had a turnover of €31 million from customer premises equipment. Responding to questions on the issue this weekend, Nuala Buttner, an Eircom spokesperson, said: ``The bill states what the equipment involved is.''

But, pressed further, she conceded that customer premises equipment (CPE) costs are ``itemised up to five instances and more than five are rolled up''. She accepted that most corporate customers would have considerably more than five pieces of equipment. ``In the case of equipment that no longer exists, the situation with any customer is that if they come and tell us that they are no longer using it, we will stop charging them for it.

"We have no way of knowing unless they inform us,'' Buttner added. However, telecoms industry sources said that some clients experienced great frustration when they sought to obtain detailed information from Eircom of the services and equipment for which they were being charged. Correspondence seen by this newspaper shows that some customers have spent months seeking information from the company.

Eircom's most recent accounts show that it made a further €34 million from ``operator services'', a category that includes ``directory enquiry and operator services''. ``Directory entry'' charges are among the most frequently listed charges across documents seen by this newspaper. However, Eircom no longer owns a directory business. Eircom sold its stake in the Golden Pages to Dutch firm VNU for €185 million in 2002. ``It is more than likely that people have chosen to ignore this. Old charges can generate income when cash flow is very, very important to Eircom,'' said one telecoms consultant.

Commenting on the needless costs being incurred by institutions in the public sector, the chairman of the Oireachtas Communications Committee, Noel O'Flynn TD, said: ``There should be a root and branch overhaul by every state department in relation to their telephony charges.''

mike65

Waffler McRedmond is justifying the companies position on RTE Radio1 right now.

Mike.

damien

Poor Eircom, they're all out to get them. Just heard McRedmond on too. So he was chatting to ComReg today eh ? Interesting. I love how he quoted the National Competiveness Councils report. Again he failed to mention and RTE failed to pick up that that report asked for MORE regulation.

bealtine

I just loved the repetition of "everybody TRUSTS eircom"...
I wonder when PC BigEars is comming over to stay in his gaff?

And the old red herring of deliberately confusing competition with line rental.
Sure there's plenty of competition in the "calls" market, but very little competition (none) in the line "supply" market, which is why we have the one of the highest line rental charges in the EU.

Two apples and an orange != 3 banannas.

Eircom are out of control and have started to believe their own spin. They need to be disbanded/broken up. When a company cannot supply basic services, as is their remit, to the country they should then be split up just like the USA did to Ma Bell. Let someone else who is willing to supply the services do just that.

It's the only viable solution imho.

flamegrill

I heard McRedmond on 3 different radio stations claiming eircoms innocence. It's beyond a joke at this stage ... what next will the SBP dig up?

Mr_Man

Folks,

the following quote from the SBP article seems to have been slipped in during the uproar about the hidden charges:

Buttner said she could not comment on how much extra revenue Eircom had made from recent increases in its line rental charges, but indicated another line rental increase could come next year .

So it looks like Eircom are going to screw their customers again in order to pay off the investors and bond holders. And no doubt they want to be on top of the European teleco league in some category, even if it is only for the line rental they charge.

M.

viking

Mr_Man wrote:

the following quote from the SBP article seems to have been slipped in during the uproar about the hidden charges

Sorry Mr_Man, which article is that quote in?

Viking

EDIT: Found the article.

spongebob

The She In Question is their PR Person, Nuala Buttner

Should one need the original press release then simply mail nbuttner@eircom.ie

HTH

M

eircomtribunal

Mr_Man wrote:

Buttner said she could not comment on how much extra revenue Eircom had made from recent increases in its line rental charges, but indicated another line rental increase could come next year



So it looks like Eircom are going to screw their customers again in order to pay off the investors and bond holders.M.

I forget the name of the Irish Minister who said, when directing the regulator to introduce wholesale line rental, he would take out the line rental part of the basket (thus hindering Eircom to further increase the line rental), if the wholesale line rental did not bring about a change in the competitive landscape.

Of course our cute regulator, who had mismanaged the introduction of line rental for years, giving Eircom a colossal competitive advantage, then had introduced a wholesale line rental package that Eircom couldn't have designed any better, that degrades the OLO to become the bill charging agent for Eircom and that can neither improve competition nor do anything for the customers interest, as it is based on a resale minus calculation. However much Eircom decides to raise the price of line rental, and they can by lowering the call pricing, the wholesale price, which is "fixed" at 10% minus from their resale, will simply go up, too.

Eircom will not hesitate to increase its anti-competitive cross financing of calls by the line rental profits. The long blue bar in the Irish column shows how little room there is for competing Irish Telcos. Bad for Irish customers. Luxembourg is similar. They are the other country in the EU with an inapt Regulator favouring the incumbent. (Greece, the EU bb laggard, is different: they have practically no English and not much to find on the net; even a good regulator, which they don't have either could achieve all that much) Ireland could catch up with them eventually on the bb side, with alcohol consumption they have just beaten us to second place.

Comreg has already been over the moon in a statement about the phenomenal success of their wholesale line rental, because some 15 000 customers have chosen to pay Eircom now vial their Telco of choice.
Ahern has chosen not to take out the line rental of the basket, thus making sure we will see another line rental increase early 2005. It beggars believe. No use in blaming Eircom when they'll execute the increase. The real culprit has left the department.
P.