Ireland fourth most expensive EU-25 country for telephony

eircomtribunal

Press Release for ComWreck 11th April 2005

Ireland fourth most expensive country in the EU-25 for telephony.

Communications Regulator ComReg keeps the public in the dark about the fact that Irish residential and business customers of incumbent Eircom pay the fourth most expensive monthly phone bills in Europe.
The official OECD study comparing the monthly phone bills of all the EU incumbents' customers (composite basket) shows Ireland in unfavourable fourth most expensive place.
Eircom customers' monthly telephone bills are 11 places above the EU-25 average.
While ComReg "simply" kept silent about the important comparative survey, Eircom went one step further: In big press ads it lied "eircom's customers' telephone bills are cheaper than the EU average" and used a false OECD/ComReg chart to underpin the frivolous claim. ComReg were happy to have their name and chart misused and raised no objections to the misinformation.

See all the facts on www.comwreck.com. Direct link to the article is http://www.comwreck.com/blog_39_april11.html

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Sponge Bob

Why did Comreg never ever take them to the ASAI or to the Broadcasting Commission over this and over the 11811 Business earlier ?

eircomtribunal

As I've been asked about the Eircom ad chart. Here's a bigger pic of the "fact" part of the ad:

Again, as I've highlighted in the comwreck article, the OECD national call basket (including the line rental part) has nothing to do with the monthly phone bill. It is only one sectorial cost factor, which our failed regulator likes to publish, because it gives the impression we were at EU average pricing.
The OECD has specifically developed the "composite basket", since the year 2000, to allow a comparison of the monthly telephone costs within the EU countries. I would not expect Eircom to publish the damaging composite basket. But I find it inexcusable of ComReg not to publish the important figures, but trick us with sectorial charts.

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DonegalMan

eircomtribunal wrote:

Again, as I've highlighted in the comwreck article, the OECD national call basket (including the line rental part) has nothing to do with the monthly phone bill.

Peter, what is the main difference between the two calculations?

eircomtribunal

DonegalMan wrote:

Peter, what is the main difference between the two calculations?

The monthly telephone cost of a user arrises from line rental (including some measure of the installation cost), local calls, national calls, international calls and calls to mobiles. As usage varies from customer to customer, "baskets" are devised to estimate average usage costs.

The OECD has devised the "composite basket" to measure and compare the average monthly telephone costs. (To be precise there is one for residential and one for business usage).

Eircom has solely and misleadingly used one segment of the OECD "composite" (residential) basket, namely the "national (residential) basket", when only the "composite" basket informs about the comparative cost of telephony in the various countries.
Up to the year 2000 the OECD/EC used the "national call basket" (as in measuring fixed national call costs) for its comparisons, but has since moved on.(See quote from the EC document below). Both ComReg and Eircom have refused to move into the 21 century it seems.

I'll quote from the EC document, which spells out in the clearest term the importance and meaning of the "composite basket". (By the way this is also the EC document where ComReg and Eircom find the sub-baskets they prefer to publish to mislead the Irish public)


From the “European Electronic Communications Regulation and Markets 2004 (10th report) Annex 3 - 82” (highlights through bold by me)

8.3. AVERAGE MONTHLY EXPENDITURE (COMPOSITE CALL BASKET)

The figures presented in this section are intended to provide an estimate of the average monthly expenditure of a “standard” European consumer (business and residential). The Basket Methodology for Telecommunications Cost Comparison has been devised by the OECD and accepted in most countries as the most stable and neutral method of comparison.
A full description of the methodology can be found in “Performance indicators for public telecommunications operators”, ICCP Series No.2.2, OECD 1990.
The user is assumed to have a contract for the provision of voice telephony services with the incumbent operator, and to use only this operator for all types of calls (local, long-distance, international, calls to mobile). Since consumers are making increasing use of call-by-call carrier selection, in particular for specific highly discounted types of calls (i.e. international and long-distance), the figures given below are purely indicative, and do not necessarily reflect the cheapest solution available. The charts below show the average monthly expenditure for standard residential and business users as of August 2004, expressed in €, based on the standard tariffs charged by the incumbent operators (i.e. excluding any discount packages). This means that lower costs can be achieved if the user subscribes to one or more discounted packages.
The basket of calls used to estimate average monthly expenditure is the new “composite OECD basket” which includes not only fixed national calls (as did the old basket), but also fixed international calls and calls to mobile networks. The revised OECD baskets were adopted in May 2000.
The OECD residential/business baskets are defined as follows (on an annual basis): The fixed (i.e. non-recurring) charges include the annual line rental charge plus the charge for the installation of a new line (depreciated over 5 years). Fixed charges for residential users include VAT, while for business users VAT is excluded. The usage charge for residential users refers to a basket of 1.200 national calls to fixed lines, plus 120 calls (with an average duration of 2 minutes) to mobile networks (Representing 10% of the number of calls to fixed lines), plus 72 international calls (Representing 6% of the number of calls to fixed lines). The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend). The call duration varies from 2.5 to 7 minutes, depending on time and distance. The usage for residential users is weighted towards off-peak hours, and with typically long calls. Only 36% of the calls are within normal business hours; 64% are for distances below 10 km; 9% are for distances above 100 km. The usage charge for business users refers to a basket of 3 600 national calls to fixed lines plus 360 calls (with an average call duration of 2 minutes) to mobile networks, plus 216 international calls. The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend), and with a call duration of 3.5 minutes regardless of time of day and distance. The usage for business users is weighted towards business hours, and with typically short calls. Over 86% of the calls are within normal business hours; 64% are for distances below 10km; 12.5% are for distances above 100 km."

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eircomtribunal

DonegalMan wrote:

Peter, what is the main difference between the two calculations?

I recognise from talking to people that the trickery of Eircom's chart is not easily evident. This quote from the European Commission document explains it in a nutshell:
"The basket of calls used to estimate average monthly expenditure is the new “composite OECD basket” which includes not only fixed national calls (as did the old basket), but also fixed international calls and calls to mobile networks. The revised OECD baskets were adopted in May 2000."

In Eircom's chart only the cost of fixed line national calls and line rental are compared and not the cost of all the components that make up the average monthly telephone bill.

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damien

Mobile calls should make a big difference with the way the market is in Ireland.

nahdoic

So does this mean eircom has excellent national call charges compared with the EU? And extortionate charges when it comes to line rental, international phone calls and mobile calls compared to the EU?

So eircom used the graph with line rental and national call charges as it showed them in a favourable light, instead of taking the entire phone bill. Despite the ad saying

"eircom customers' telephone bills are cheaper than the EU average"

which obviously gives the wrong impressions it is based on the entire phone bill and not just a part of it.

something along the lines of

"eircom customers' combined national call charges and line rental are less than the EU average"

would have been fair?

Blaster99

It may well be that mobile calls are particularly expensive in Ireland, and that's not something Eircom can do much about.

These types of comparisons are always difficult to get right. I would think Irish consumers/businesses make a lot more international calls than is the case in other countries, simply because it's a very small country in terms of population and people from Ireland tend to move around quite a bit and businesses tend to do business with the UK etc.

lucernarian

There's a simple reason for ComReg not showing the more accurate figures and letting Eircom spread misinformation. If people saw those facts advertised to them then inevitably questions would be asked about why this is the case and surely enough, ComReg would attract some unwelcome attention.

In my opinion, ComReg have a vested interest in not showing these damning figures. After all, who advertises the fact they're doing a bad job?

eircomtribunal

nahdoic wrote:

something along the lines of
"eircom customers' combined national call charges and line rental are less than the EU average"
would have been fair?

nahdoic, you've got the gist in a few lines, when it takes me pages...
I would not say "fair", as in "lending itself to give a meaningful comparison", but "acceptable" as in "not being a direct lie".
Of course this slogan does not sound 1/10 as good as the one eircom used, indeed readers might notice the smell of a rat straight away and question the selection of compared prices.

In a way I can understand – not respect – McRedmond's position. He is getting big money from the shareholders to sell Eircom's products/brandname. He knows how far he can go (very far!) and get away with lies, tricks, even when they breach the law and he shows no scruples to do so.

ComReg would never come out with the direct lie as Eircom did, they'll do it in the sly way of deliberate omission, deliberate manipulative selective publication of facts, big lies in the primary message which are contradicted but still covered by the footnote etc.

So, personally I prefer McRedmond's arse to the faces of the civil servants in ComReg who we all pay (and pay very well) to work for the common good, for the interests of us and our future, and who, for their own petty interest of not being seen as the failure they are, misinform us with the same effect as Eircom.

It is high time for Noel Dempsey to put an end to these shenanigans.

But where is Noel? At the UN and making my job of writing parody nearly impossible. How can one satirise that?( :)Sorry, T.B.)
See DCMNR press release:

The Minister for Communications, Marine & Natural Resources, Noel Dempsey T.D., today addressed the second meeting of the United Nations ICT Task Force to take place outside the United Nations Headquarters in New York. Speaking at the conference in Dublin the Minister highlighted the positive impact Information Communication Technologies (ICTs) can have upon delivering education in the developing world.
"Education is a powerful tool. With it whole communities can be empowered. People can be engaged to fully participate in their country's development and prosperity. It can be the primary mechanism not only to raise standards of human capital but also to tackle such widespread issues such as the AIDS crisis, gender equality and high-levels of poverty," said the Minister.
"Information and Communication Technologies can provide a practical and enabling solution for improving the quality and quantity of education. ICTs are a tool - a tool to allow us to communicate and share information, to learn and work more efficiently and effectively," he added.
Participants in the forum are drawn from across a broad spectrum of Governmental concerns, private sector interests, development agencies and academia. Over 200 high level delegates will attend the event over two days, including An Taoisech, Bertie Ahern T.D., world-renowned economist Prof. Jeffrey Sachs of Columbia University, Ambassador David Gross, U.S. Coordinator for International Communications & Information Policy & senior officials of major ICT corporations such as Hewlett Packard, Nokia, Cisco Systems, Intel & Microsoft.
"Ireland has benefited considerably from a focused investment in fusing technology with the power of human capital. We seek to continue this by using ICTs to deliver a more effective education system, hence the development of our own domestic Broadband for Schools initiative. We are also investing €4 million in the Task Force's Global e-Schools and Communities Initiative," concluded the Minister

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eircomtribunal

ComReg's misinformation and propaganda is not only picked up and further skewed by Eircom's advertising guys.

On (IBEC's) TIF (Telecommunications and Internet Federation) website a raft of factually wrong claims are made, all probably originating from ComReg's ingeniously fabricated Quarterly Report figures:
From tif's website

Pricing
Ireland now has:
the 9th lowest residentail telephony costs in the OECD, one place ahead of the EU average
the 6th lowest business telephony costs in the OECD, two places ahead of the EU average
the 7th lowest monthly rental cost for ADSL in the OECD, one place ahead of the EU average
the 4th lowest national leased line charges in the OECD, three positions ahead of the EU average

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Sponge Bob

TIF are well able to make up their own statistics. Eircom bankrolls the IBEC Telecommunications and Internet Federation anyway so remember that when you see their statistical analyses .

MrPinK

nahdoic wrote:

So does this mean eircom has excellent national call charges compared with the EU? And extortionate charges when it comes to line rental, international phone calls and mobile calls compared to the EU?

One possibility. Another is that we spend less on national calls not because the rates are cheaper, but because we make less nation calls than other EU countries. I'd say only 10% of the calls made in my household are to landlines.

eircomtribunal

MrPinK wrote:

One possibility. Another is that we spend less on national calls not because the rates are cheaper, but because we make less nation calls than other EU countries. I'd say only 10% of the calls made in my household are to landlines.

Your bill is weighed much more towards calls other than fixed line national calls than the OECD basket is constructed..

The OECD/EC chart about monthly phone costs (composite basket) is not the result of comparing actual bills, but from measuring the tariffs for an agreed mix of calls. For the residential composite basket the calls measured across all EC countries are:
"... a basket of 1.200 national calls to fixed lines, plus 120 calls (with an average duration of 2 minutes) to mobile networks (Representing 10% of the number of calls to fixed lines), plus 72 international calls (Representing 6% of the number of calls to fixed lines). The usage charges for national calls to fixed lines are calculated with a weighted distribution over 14 distances from 3 to 490 km, at representative times of day (4 calls during the week and 2 during the weekend). The call duration varies from 2.5 to 7 minutes, depending on time and distance. The usage for residential users is weighted towards off-peak hours, and with typically long calls. Only 36% of the calls are within normal business hours; 64% are for distances below 10 km; 9% are for distances above 100 km."
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