Damien Mulley on Prime Time.

swiss

Apologies if this has been mentioned but I've just seen Damien on Prime Time giving a very competent overview of the current situation with Smart telecom. For those who haven't seen it, the basic points that were made was

- Smart set very aggressive and ambitious market penetration goals of 70k subscribers but only managed a relatively small percentage of that goal.
- Owing to much of this deficit is the tardiness in which LLU has been deployed by Eircom
- Smart is now in fairly serious financial difficulty
- This could be very bad for telecoms in Ireland as it could discourage other competitors
- Ultimately Eircom could benefit from this as reduced competition will benefit the incumbent.

Succinct and accurate. Well done.

Valentia

Well done Damien. Very authoritative and to the point.

mike65

Oh Crap! Missed it dispite seeing the start of the feature.

Mike.

machalla

Caught the end of it. What little I saw of Damien got the point across. Good job. Glad to see someone fighting the spin. Some sickening stuff coming out of EirComReg at this point.

Sarsfield

Just caught the end of it. From what I saw, I also thought Richard Curran had a good grasp of the situation.

oscarBravo

Available in RealPlayer format on the RTE website - watching it now.

Foxwood

oscarBravo wrote:

Available in RealPlayer format on the RTE website - watching it now.

http://dynamic.rte.ie/av/230-2178933.smil

Prime Time isn't normally available online until Tuesday morning - that's probably the one advantage of this happening on the day of Berties troubles.

jward

Damien hit the nail on the head. I seen ComReg's press release and its made me feel ill. They thanked eircom for their help.

We would like to acknowledge eircom’s co-operation for putting in place these interim measures which will give a service to the affected customers.

As a Smart Telecom customer I'm extremely annoyed at the way things have gone and ComReg's role in this.

Here's a snippet from ComReg's site (http://www.askcomreg.ie/home_phone/Thinking_of_changing_telephone_company.88.LE.asp)

Switching is easy. You just have to sign an authorisation form or confirm your consent over the telephone (a process known as Third Party Verification). Third party verification is an industry agreed process that allows you the flexibility to sign up with other companies for Carrier Pre-Selection (CPS) over the phone. Your new service provider will take it from there. There will be no disruption to your telephone service and no need for anybody to visit your house. You can keep your telephone number and your directory listing. It is important to note that you may need to contact the losing operator in advance of changing service provider to check to see if any cancellation notice or cancellation period/penalties apply.

However when switching to Smart Telecom you were forced to change number. This put an awful lot of people off despite Smart Telecom offering a very good broadband package. I switched regardless, but I'm sure this had a huge impact on consumer uptake.

ComReg did nothing to force eircom to comply. If Smart Telecom does go under ComReg has a lot to answer for and we'll all be forced to pay more for less. I also think the impact of this will go well beyond Smart.

I've contacted ComReg to highlight my concerns but they haven't replied. If you care about the situation I'd urge others to do the same.

John
Blog

Sponge Bob

consumerline@comreg.ie is the main email address.

Tom Young

People your missing the point.

[I've not posted here for some months, but on this matter I feel the need.]

The Minister, ComReg and eircom all supported Smart. This boards subscribers to a large extent supported Smart.

Smart was flagrantly burned cash, overpaid employees and sought(got) funding where funding should not have been given.

Get an interview or two with a few people who were on the workforce [past tense].

I disagree completely with the premise that the Regulator is at fault in this matter. If anything the matter is purely contractual and eircom were within their rights.

Yes, the consumer is burnt. Yes, the reputation of the industry is damaged. Yes, competition will suffer. A properly run operation and company would not be, or let themselves get into such a problem.

I'd like a formal enquiry into why the former CEO and CFO are not being held to account for this mismanagement. Director of Corporate Enforcement, where are you now?

Tom.

jward

I agree that in recent months Smart has been burning cash and been irresponsible. Thats a fact.

Another fact is that their initial takeup projections would have been based on the reasonable assumption that ComReg would enforce Third Party Verification allowing switchers to keep their number.

I think the precedent is set. If you want to take on eircom aggressively you're doomed.

Tazz T

Tom Young wrote:

The Minister, ComReg and eircom all supported Smart. .

How did eircom support Smart? They fought Smart every inch of the way, making it deliberate for customers to sign up. And Comreg did nothing to help.

Maybe Smart was badly managed, but it's fair to say that eircom made sure they hit them financially too.

machalla

I'm really beginning to wonder how many fifth columnists from Eirscum and Comwreck we have on these forums in the last day or two.

Sam Johnston

I just called Smart Telecom today Wednesday 3 October (we have connections in Harmonstown and Tallaght) and got straight through to a rep who apologised and said that we would be receiving calls again within 2-3 days.

In light of all that's happened (and over what, 1.7m? ie the corporate equivalent of a cup of coffee) I'm impressed and will be standing by Smart Telecom and encouraging others to do the same. It's Eircom and ComReg along with the relevant minister(s) that should be feeling heat over this.

Sam

Tom Young

Tazz T wrote:

How did eircom support Smart? They fought Smart every inch of the way, making it deliberate for customers to sign up. And Comreg did nothing to help.

Maybe Smart was badly managed, but it's fair to say that eircom made sure they hit them financially too.

Eircom allowed Smart 19 wholesale credit term infractions. Allowed/supported them access to WLR, CPS, LLU, Interconnection .....all wholesale offerings. So the statement is wholly accurate.

Yes, eircom's retail arm fought Smart, as they would any competitor. Not on the wholesale side where Smart were treated as a paying customer of eircom plc and now eircom Ltd.

....problem is, and its doesn't take a genius to work this out, they didn't pay. I think 19 infractions is generous.

Frankly, the main looser here is the paying customer. By reckless trading both eircom, the end-users and other telco's are now left holding the debt and also without services.

Once must pay ones bills.

machalla: Correct me if I am wrong in assuming that a chat/message board is in-fact for that purpose. 5th Columnist?

machalla

Try this. But you can't trust wikipedia remember. Not unlike certain Telecoms Monopolies..

http://en.wikipedia.org/wiki/Fifth_column

What exactly is there to correct? Oh wait, name spelling.. machalla not MACCALLA

johncorleone

swiss wrote:

Apologies if this has been mentioned but I've just seen Damien on Prime Time giving a very competent overview of the current situation with Smart telecom. For those who haven't seen it, the basic points that were made was

- Smart set very aggressive and ambitious market penetration goals of 70k subscribers but only managed a relatively small percentage of that goal.
- Owing to much of this deficit is the tardiness in which LLU has been deployed by Eircom
- Smart is now in fairly serious financial difficulty
- This could be very bad for telecoms in Ireland as it could discourage other competitors
- Ultimately Eircom could benefit from this as reduced competition will benefit the incumbent.

Succinct and accurate. Well done.

Personally I thought that Richard Curran (Sunday Business post) gave a more balanced and insightful view on the situation. The reasons for Smarts demise are many, but one that fails to be understood (or recognised) by many of the readers of boards is the fact that Smart were spending vast sums of money on a business case that didn't work.

For those who seem to want to blame Eircom, remember they are a publically owned company who have a legal duty to do everything they can for their shareholders, so they have acted and are acting correctly and in their best interests. They have done nothing wrong. If you want to lay blame place it firmly at the governments (And by that Comregs) door.

Tom Young

Here here paragraph 1.

Can't agree with paragraph 2. The fiduciary duty to both shareholders and stakeholders (to include customers) luys firmly at the feet of the Board of Directors. If this was the USA this company would be filing for chapter 11 and the likelihood is that the officers would face criminal prosecution akin to Enron/WorldCom in 2002/2003. Its not the US though. We don't have such rules and the UK market listing would complicate matters further.

You can't lay blame at either the government or ComReg's door. Both acted impartially and fairly. Rumour and reports also state that they (both) through intervention may have brokered a deal with the disputing parties.

Blame: Board of Directors at Smart [Past]. Failed in fiduciary duties to investors, shareholders, suppliers and customers.

PS: I wonder did the schools [Broadband for Schools Initiativ] and Court Services loose services also?

machalla

Someone on here had the perfect quote to fit whats happened.

"Eircom are only doing what any monopoly in a de-regulated market would do".

I would suggest that Eircon have done things wrong that we cannot prove at the moment but we can certainly surmise. From a commercial point of view Eircon have thrown €4m down the drain here but eliminated a competitior who forced them to actually compete on BB prices (somewhat).

Smart were looking through rose-tinted glasses if they ever thought they were going to get a level playing pitch when Eircon effectively own Comreg and the government care not a whit until things like 40,000 people getting cut off happen in a pre-election year.

Of course ****ing away how many million on sponsoring the weather and head huntin (not the way I'd like them to do it) Eircon middle-management didn't help matters

uncle_sam_ie

johncorleone wrote:

If you want to lay blame place it firmly at the governments (And by that Comregs) door.

When they have that really nifty website and a hip commercial that explains what BB is, how can you really blame poor Noel.

jward

Tom Young wrote:

You can't lay blame at either the government or ComReg's door. Both acted impartially and fairly. Rumour and reports also state that they (both) through intervention may have brokered a deal with the disputing parties.

I'll reiterate but the key questions for me are:

1) Why did eircom not allow you to keep your number when switching to Smart
2) Why did ComReg not force them to comply

Blaster99

johncorleone wrote:

Personally I thought that Richard Curran (Sunday Business post) gave a more balanced and insightful view on the situation. The reasons for Smarts demise are many, but one that fails to be understood (or recognised) by many of the readers of boards is the fact that Smart were spending vast sums of money on a business case that didn't work.

Very good, and what was the primary reason the business case didn't work?

machalla

Sorry this is a little offtopic but I didn't want to go starting a whole new thread for it.

I'm writing my own little missive to Mr.Dempsey (info@noeldempsey.ie) at the moment. I wanted to just check, we are the only country in the EU that cannot port landline numbers from the one company to another (ie.Eircon landline numbers couldn't transfer to smart)?

Sponge Bob

and Bulgaria too, do not forget them please !

thebman

Tom Young wrote:

Here here paragraph 1.

Can't agree with paragraph 2. The fiduciary duty to both shareholders and stakeholders (to include customers) luys firmly at the feet of the Board of Directors. If this was the USA this company would be filing for chapter 11 and the likelihood is that the officers would face criminal prosecution akin to Enron/WorldCom in 2002/2003. Its not the US though. We don't have such rules and the UK market listing would complicate matters further.

You can't lay blame at either the government or ComReg's door. Both acted impartially and fairly. Rumour and reports also state that they (both) through intervention may have brokered a deal with the disputing parties.

Blame: Board of Directors at Smart [Past]. Failed in fiduciary duties to investors, shareholders, suppliers and customers.

PS: I wonder did the schools [Broadband for Schools Initiativ] and Court Services loose services also?

Eh you can blame the government or comreg depending on whose responsible for allowing customers of Smart that have done nothing wrong to be cut off from a phone service. There should be regulations in place to protect consumers in this case.

The dispute is between Smart and Eircom not Smart customers and both Smart and Eircom acted irresponsibly IMO. There were obviously no guidelines by the regulator for this situation so they did whatever they felt like.

johncorleone

Blaster99 wrote:

Very good, and what was the primary reason the business case didn't work?

Smart bought and maintained loss leading services, spent vast sums of money on advertising, paid to bring their main supplier to court (Like it or not this is never likely to endear them to you), and simply tried to do too much technically in too short a span of time. There's sod all money in *residential* services at the best of times and you need a massive customer base, a poor service (where poor = heavily contended and/or badly supported) or a niche market to make any money at all (provided you're not the incumbent of course).

In this small margin business Smart decided to make it even more difficult for themselves by charging a price which was in IMHO unsustainable.

On top of their transit costs they had a lot of other overheads - Bandwidth costs money, leased fibre costs money, staff cost money, line rental costs money, unbundling exchanges costs money, network equipment costs money, cpe costs money - having worked on the margins in ISP's I can tell you you're going to find it very difficult to break even on 35 Euro. Before someone mentions ISP's in other countries, to give you an example of the UK industry - the services in the UK which seem to offer a lot for your money tend to either A) Provide a poor service with poor support Are the incumbent C) Have vast amounts of customers D) Are funded by companies with very deep pockets.

It's sad to say but it becoming increasingly difficult for small ISP's to really make an impact in the industry and I believe it will only become more difficult over the next 10 years. Of course with more effective regulation we could help to level the playing field but even still I believe the small guys days are numbered. IMHO Smart simply tried to do too much too quickly on margins that weren't sustainable. They also vastly under-estimated the problems they would encounter with the regulator, their business case should have been prepared to deal with a worse case scenario.

Tom Young

jward wrote:

I'll reiterate but the key questions for me are:

1) Why did eircom not allow you to keep your number when switching to Smart
2) Why did ComReg not force them to comply

1) eircom had nothing to do with it failing. Industry developed Geo Number Portability in 2000 and did not consider implications for cross fertilisation of the Access Reference Offering for LLU (Broadband). Smart decided to utilise this access and strategy and knew exaclty what they were getting into.

Allocating another number meant services were turned up more quickly. Network portability testing was only completed by Smart in recent times.

2) Its hard to make someone to comply with something, when in fact they are fully in compliance. The Access meetings in industry were convened to solve defunct and inoperable portability for LLU/WLR and DSL and progress was made to this end.

/break.

machalla: Number portability does exist, the EU Commission reports on two flavours.

Network to network voice portability, live and well and operating here since 1999 and 2000 for Non Geo Numbers e.g., 1800 and Geo Numbers since 2000.

GNP LLU Portability (For unbundled local loop lines) very different. Not available widely mainly due to complexity and problems with incumbent systems. Some countries resolved, others realised that ULL would die off, unlike Smart.

Take care in your statement.

Tom Young

brim4brim wrote:

Eh you can blame the government or comreg depending on whose responsible for allowing customers of Smart that have done nothing wrong to be cut off from a phone service. There should be regulations in place to protect consumers in this case.

The dispute is between Smart and Eircom not Smart customers and both Smart and Eircom acted irresponsibly IMO. There were obviously no guidelines by the regulator for this situation so they did whatever they felt like.

So you support my position on reckless trading by Smart?

Honestly, do you think there would be any competition if a regulator had that type of control?? I think not.:rolleyes:

johncorleone

Tom Young wrote:

You can't lay blame at either the government or ComReg's door. Both acted impartially and fairly.

I don't think that anyone (other than comreg) can really believe that comreg have done a effective job in bringing competition to the ISP industry in Ireland. They haven't, unfortunately for the consumer they've failed miserably.

Tom Young

The ISP industry is not regulated. Have you missed something? or is that terminology I am struggling with.

I'll read that as 'communications industry' as I guess that's what you might have meant.

If you ran a business I trust you'd run it properly?

You'd carry out due diligence on offerings, markets, competition, and you hire the best you could afford?

The regulator is just not to blame here. You have to quit blaming them.

Smart got all the air time they needed at ComReg, at every level. I know this to be true. The regulator did all in their powers to support them, effectively this matter tarnishes parties now in all peoples/Regulator's and investors eyes. Its frankly not good.

JohnC.

Tom Young wrote:

Smart got all the air time they needed at ComReg, at every level. I know this to be true. The regulator did all in their powers to support them

Letting eircom walk all over them at every opportunity helps them in what way?