How to kill off Eircom bids?

the_syco

http://news.eircom.net/breakingnews/16278490/?view=Standard
http://www.breakingnews.ie/business/eycwmhaugboj/rss2/

So, STT bids for Eircom, and then a few days later, Comreg reduces the line rental charge to 77c per month...

I wonder what effect this will have on the bid? Slashing the price from €8.41 to 77c is a major jump, and I wonder how much the "other operators" will "further investment in critical infrastructure", or just sit on their ass.

I also wonder how the slash will create a negative incentive to further investment in critical infrastructure by Eircom?

Cabaal

Given eircoms history I'd expect them to bring Comreg to court about such a price cut

watty

It's only LLU linerental (not very many people), and the line rental on LLU is only one part of cost. It's the ordinary line rental that needs to go to 1/3 to 1/5th of current level. Otherwise there won't be any customers.

Cabaal

watty wrote: »

It's only LLU linerental (not very many people), and the line rental on LLU is only one part of cost. It's the ordinary line rental that needs to go to 1/3 to 1/5th of current level. Otherwise there won't be any customers.

Agreed,
Up to now LLU costs for ISP's was extremely high and not really worth it which made it unattractive...sure Smart and BT made "some" head way but thats it.

I doubt we'll ever have anything on the scale of the UK when it comes to LLU rollout.

At this stage the real killer for ADSL rollout is PSTN line rental costs which are extremely high and this makes getting ADSL unattractive to consumers when compared to Midband products provided by O2, Three etc.

This means that as ADSL take-up has slowed companys are less likely to invest money in it, be it Vodafone, Smart etc as they are less likely to see returns on these investments.

Sponge Bob

The 77c price ( revised from an initial proposal of 75c in December) is where .

1. You pay full line rental to eircom and have voice through eircom
2. You spilt the line IN the exchange and connect to a different BB provider while eircom keeps the voice portion
3, The BB provider then pays 77c a month to eircom for 'their share' of the line to your house on which they provide BB but not voice and voicemail etc .

This is called Line share or LS or Shared LLU depending on who is talking .

You will have 2 bills every month .

The alternative is FULL LLU where the provider supplies Voice and BB and eircom only the copper itself and the provider bills you for the lot , not eircom .

Shared LLU used to be €8 or €9 a month for years , it is around €1 or €2 at most in any advanced knowledge economy I can think of .

chalkitdown

What are the implications of this on unbundled operators like Smart?

Sponge Bob

Smart can offer DSL only packages and make some money on them as indeed can anyone else . Therefore they can compete with the eircom bundles that Comreg does nothing about .

Farcear

"I also wonder how the slash will create a negative incentive to further investment in critical infrastructure by Eircom?"

So, assuming ComReg gets its way, is this a good thing for broadband customers in Ireland?

watty

It's of marginal value as it affects so few people and doesn't address loads of other issues.

Steviemak

Sponge Bob wrote: »

You will have 2 bills every month

Not necessarily - BT bundles LS with their SB-WLR product, so in that case its one bill.

Rather_b_diving

Steviemak wrote: »

Not necessarily - BT bundles LS with their SB-WLR product, so in that case its one bill.

It might be single billing but you're still paying eircom 25.47 (Inc VAT) for the phone line. Plus eircom own the line and charge other operators for all your incoming calls - they're still laughing all the way to the bank!

The real test is part 2 of comregs proposal which is to reduce the full line charge from its current 16.43 to 12.50(ish)
Most LLU lines are fully unbundled not lineshare and in these cases that's all eircom get - they don't charge the line rental to the customer OR get to charge other operators for the incoming calls.

Sponge Bob

Rather_b_diving wrote: »

It might be single billing but you're still paying eircom 25.47 (Inc VAT) for the phone line. Plus eircom own the line and charge other operators for all your incoming calls - they're still laughing all the way to the bank!.

I think there is a slight discount off the headline line rental rate and your figure includes VAT . They would pay eircom around €20 a month and another €8.50 for LS and eircom terminate incoming calls as you said...and charge for voicemail in full if that is required .

€28.50 a month to eircom before you add BB and a call package ( and VAT) for the end user.