Another Eircom scam ?...

Ripwave

De Rebel wrote:

The bill that ripwave posted early in this thread is typical. 7 calls in a month. 15 minutes in total.

Just to clarify - that wasn't the full bill - that 15 minutes was just the "free" €1.21 worth of calls provided in the package. There were another 100+ calls, totalling about €17 on the bill as well.

And the scheme as announced only last year by the Minister for Social and Family Affairs was intended to pay the full cost. And psychologically, that’s very important, especially for the elderly who tend to be unduly concerned with budgeting. This
press release sets out the stall. So somewhere along the way the Department dropped the ball.

You're mis-reading that press-release. That announced the modification of the existing scheme so that the Department would pay the allowance through any licensed land-line provider, not just eircom, as had been the case up to then (a historical anomaly, that the department was setting right). The press release simpley tells recipients of the allowance that they can now choose a provider other than eircom, and says that the value of the allowance is €20.41 a month plus VAT. It is entirely up to the providers how they package whatever they can offer for €20.41 plus VAT, and the press release gives some examples, and says that eircom is including €1 of calls.

The allowance wasn't increased when eircom increased it's line rental this year.

Ripwave

SeaSide wrote:

If you accept that as true there is no point in any telco offering any service to anyone. As there are alternative players in the market I would have to assume that they think there is a margin.

I've argued strongly that the government should be getting a lot more for it's money than it is now - at the very least, it should get a massive discount because it decreases eircoms bad debt concerns.

But there is no point in tendering for a service that can only be supplied by one company. The only way that any other company can supply a landline is to get that landline from eircom (for the vast majority of people in Ireland). And right now, the cost of "renting" that landline is almost as much as the allowance. Only realistic LLU pricing is likely to change that. (WLR isn't LLU).

A 64m euro contract (268,000x20x12) is a pretty big pile of cash for any telco. It depends whether you think that 268,000 individuals can find a better deal for themselves or whether one organisation spending 64m will get better value. In the end the service the customer gets is the same but the taxpayer will not be sponsoring eircom to the same extent even if it is only 10%

Compared to the €8 billion that has been mooted as the cost of delivering FTTH for the whole country, €64 million a year isn't even in the ball park.

Unless those 268,000 individuals can say to eircom "give us a discount, or we'll take our business elsewhere", then they aren't in a terribly strong position. And right now, you can't take your line rental business elsewhere - there isn't any choice! A "fixed mobile" package that included a handset, handset insurance, and say 250 minutes a month for the base price of the package might be ideal, but it would have to be offered on a locality by locality basis ("fixed mobile" would work in the immediate vicinity of your "home" base station, and would use a (01) type phone number, so that people calling you wouldn't have to pay mobile rates), which would prevent a centralised tendering process.

The Department has taken the first step, by liberalizing the rules for the benefit to allow provider other than eircom to participate. I'd absolutely love to see them put the squeeze on eircom somehow (at the very least by mailing all recipients at least once a year outlining the competing packages available), but I don't think that there's any point in them doing a national tender, at least in the current environment.

spongebob

Ripwave wrote:

A "fixed mobile" package that included a handset, handset insurance, and say 250 minutes a month for the base price of the package might be ideal, but it would have to be offered on a locality by locality basis ("fixed mobile" would work in the immediate vicinity of your "home" base station, and would use a (01) type phone number, so that people calling you wouldn't have to pay mobile rates), which would prevent a centralised tendering process.

It is strongly rumoured that O2 in Ireland have approached the Dept of Seamus Brennan with something very much along these lines and at a figure below €20 a month incl VAT .

M

eircomtribunal

Ripwave wrote:

But there is no point in tendering for a service that can only be supplied by one company. The only way that any other company can supply a landline is to get that landline from eircom (for the vast majority of people in Ireland). And right now, the cost of "renting" that landline is almost as much as the allowance. Only realistic LLU pricing is likely to change that. (WLR isn't LLU).

Unless those 268,000 individuals can say to eircom "give us a discount, or we'll take our business elsewhere", then they aren't in a terribly strong position. And right now, you can't take your line rental business elsewhere - there isn't any choice!

The problem is that Dermot/Comreg's single billing product is sold to the public as a successful whole sale line rental product, allegedly enabling competitors to compete with Eircom on the line rental front, when in reality they merely write the bills for Eircom.

I find it amazing that the Department press statement promotes Eircom with the 1 euro of free calls feature. How can a competitor manage to offer the single billing and undercut the 1 euro free call offer, when there is only a 10% margin in the whole-sale line rental product?
Inertia is legendary with telephone customers, even more so in the older age group.

Realistic LLU pricing is not in sight. Nobody can undercut Eircom's line rental with the newly suggested LLU pricing. LLU will only be usable for business customers or TV-bundling.

Ripwave wrote:

A "fixed mobile" package that included a handset, handset insurance, and say 250 minutes a month for the base price of the package might be ideal, but it would have to be offered on a locality by locality basis ("fixed mobile" would work in the immediate vicinity of your "home" base station, and would use a (01) type phone number, so that people calling you wouldn't have to pay mobile rates), which would prevent a centralised tendering process.

Basing mobile calls in the locality of the home on normal landline tariffs is a feature mobile operators offer in other countries. So no technical hindrances there. A mobile would as well have additional qualities for older people as it can double as a distress gadget.
Hate to see the mobile operators making the dosh.

P.

damien

eircomtribunal wrote:

How can a competitor manage to offer the single billing and undercut the 1 euro free call offer, when there is only a 10% margin in the whole-sale line rental product ?

Have we even heard any of the competitors complain about this recently ? If I was a competitor I'd be mouthing about this like Michael O'Leary.

shoegirl

damien.m wrote:

Wasn't the last line rental increase allowed because of eircom's "co-operation" with the VUS scheme ?

They agreed to this scheme and in turn they got their line rental ? So Eircom got a guaranteed 5 Million payment per month from the Govt and for them to accept this they were allowed a line rental increase ? Can someone verify this ?

You're right Damien.

And then they went and hid it in the most obscure part of the phone book so nobody could find it.

By the way the "Vulnerable User Scheme" is different from the Social Benefit Scheme. As far as I know the latter just pays line rental, well it did, until the line rental was hiked so high the Social Welfare was no longer willing to fully subsidise it.

The "Vulnerable User Scheme" is a cynical ploy by eircom to make a budget scheme so unattractive to users that they will not take it. Who wants to be a "vulnerable user?" Who sees themselves as a "Vulnerable user"? The genuinely vulnerable users are the ones already on the social benefit scheme so what this really is is eircom's excuse for a budget rental scheme that they are making unattractive so as to divert customers towards the normal package.

As somebody rightly pointed out, if the Social Welfare services decided to contract this out, it would be worth an enormous sum. The danger I see though, for these users, is it is more complicated to transfer to another line provider, quite simply because only eircom is obliged to provided services to everybody. Most other providers would probably not be particularly interested in low volume users who probably make few calls. And judging from eircom's expressed unhappiness at having to provide services to the non-filthy rich, they are likely to make a strong attempt to resist USP obligations over the next few years.

eircomtribunal

shoegirl wrote:

The "Vulnerable User Scheme" is a cynical ploy by eircom to make a budget scheme so unattractive to users that they will not take it.

In a response to the Oireachtas Committee about their 2 Nov 2004 hearing, I wrote to them about the VUS:

"Not least because I have high regards for your work, I start with criticizing you, the members of the Committee:

A) ComReg – Vulnerable User Scheme – Line Rental hike

After you successfully teased out the truth about the 23% line rental hike in your January meeting you made very valuable suggestions to ComReg, for example to change the VUS from a sign-up package to an automated billing feature.
ComReg deliberately removed the subcap on the lower quartile of bills, in order to allow Eircom to increase the line rental, believing Eircom who had told them that they were making a loss with the lines. ComReg replaced the sub cap – which if it had stayed in place would have reduced Eircom's ability to hike the line rental to 12% (as Eircom state in their SEC filing) – with the Vulnerable User Scheme (VUS), which they let Eircom design to be ineffective! – Eircom were able to hike the line rental by 23%, without any counterbalancing effect of the VUS, which is a total farce in many aspects (not advertised, not automatically implemented in the bills which fall under its modalities, not transparent for the consumer in its pricing structure, anticompetitive as only Eircom work it). ComReg did nothing since to protect the lower bill payers. Nothing has happened with the VUS charade. Most of the low bill payers are within the group of Telephone Allowance Scheme recipients and their bill hike of up to 23% is mostly paid for by the Dep. of Social and Family Affairs, whose payment went up to 92 million/year, the vast majority of it directly going to Eircom.
While the Committee had highlighted this farce and Doherty/Goggins left with egg on their faces (only 300 to 400 VUS subscribers!) and vague promises, the Nov 2004 hearing of the Committee completely ignored/forgot to follow up with any questions on progress with this issue to John Doherty.

Questions:
How high was the overall bill rise on the lower quartile of bill payers?
How many people have taken up the Vulnerable User Scheme to date? What is ComReg doing to prevent another line rental increase, which will again hit the low users most?
What is ComReg doing to bring Irish Telephone line rental into line with the EU average?"

I am looking forward to any response from the Committee members.
P.

Paddy20

Surprising update;

Got a hard copy bill from EirCoN for my line rental today. Instead of it demanding a payment of €0.94c from me.

It actually shows my account in credit to the tune of -€1.60c :eek: It appears that the Government department that is responsible for paying my telephone line rental charge in full, is now actually doing so !, No thanks to Minister Mary Coughlan T.D.

This very welcome surprise which must obviously hopefully apply to all Free Telephone Rental Allowance recipients, is clearly another feather in the cap of IrelandOffline's voluntary Committee, Martin Harran's work and the publicity recently given to the injustice by Mr Jamie Smyth of The Irish Times.

Many sincere thanks to all who helped Martin [Donegalman] behind the scenes.

Nice to know we still have some who give a damn left in Ireland

P.

MarVeL

So who blinked? Eircom or the government, and why do I have the sinkng feeling in my stomach that this means however high ericom put the charges the government will pay them. I agree with the concept of free phone lines for those who need them I just wish that the goernment had renegotiated the deal with eircom.

Can these lines be moved to a different provider?

Paddy20

MarVel,

The Government blinked and are now it seem's paying the free telephone rental allowance in full, in accordance with the legislation on the issue.

However, I do agree with you that it would have been much more logical if the Government had " Re-negotiated the deal with Eircom ". I believe they really had EirCoN over a barrel on this one, and could have easily obtained a more acceptable compromise.

As for your query; " Can these line's be moved to a different provider ? ". The answer is yes , the payment's for free line rental charge's will be paid direct to any ISP either Monthly or Bi-Monthly, provided the recipient has signed a consent form.

All the best.

P.