Ireland

The liberalisation of alternative infrastructure took place as agreed between the Irish Government and the European Commission on July 1, 1997. There has, however, been a derogation in Ireland on the date for liberalisation of voice telephony. Originally January 1, 2000, this was brought forward by over a year and took place on December 1, 1998.

In the lead up to the liberalisation date and immediately following, a number of public utilities and telecoms operators are jockeying for position and a number of strategic alliances and ventures have been announced to date. A number of different embryonic alternative providers can be identified at this stage from among the organisations that have been awarded infrastructure licences by the telecommunications regulator.

Developments remain highly changeable and, despite the early commencement of liberalisation, widespread actual customer choice will not be achieved in the shorter term: competitors to the incumbant operator, Telecom Éireann, do not have fully developed networks and can only engage in cherry-picking exercises using Telecom Éireann’s connectivity and interconnection rates.

2. Regulatory framework

A new body, the Office of the Director of Telecommunications Regulation ("ODTR") has the functions of the National Regulatory Authority ("NRA") as defined in EU law, broadly limited to infrastructure regulation.

The ODTR perceives itself as responsible for promoting "decent spread", competition and choice in the telecommunications industry and seeks to issue licences for services under the principle that, if there is demand from providers, it will respond (ODTR officer and The Regulation of Irish Telecommunications: Issues, Problems, Work in Progress, Speech by the Director of Telecommunications Regulation on October 7, 1997, ODTR 97/13, October 7, 1997).

The Office of the Director of Telecommunications Regulation has issued numerous licences for the establishment of a telecommunications network following the July 1, 1997, liberalisation of telecommunications infrastructure. These licence holders include WorldCom Ireland, Esat Telecom, Unisource Carrier Services AG (Germany), NTL Group (UK) and Cablelink.

22 General Telecommunications Services Licences and 8 Basic Telecommunications Services Licences have been issued by the Office of the Director of Telecommunications Regulation, including:

The regulator, the Office of the Director of Telecommunications Regulation, has also now published a review of the period up to full liberalisation and a schedule for the coming year, available at http://www.odtr.ie/html/review.html. The earlier introduction of full market liberalisation significantly compressed the ODTR’s schedule, although there remains a significant workload to ensure adequate number availability and smooth migration to different service providers.

3. Anticipated Alternative Network Providers

3.1 Cable and Wireless

On September 12, Cable and Wireless announced a £50 million investment plan to lay its own cable infrastructure in Dublin. C&W will focus initially on voice and data services for business customers in the Dublin area, following derogation on December 1, 1998. This is expected to include internet services.

3.2 Esat Telecom

Esat Telecom currently has over 3,000 customers in the fast-growing corporate market. Esat Telecom Group, a 45% shareholder in Esat Digifone and value added service provider was floated on the Nasdaq stock exchange in the US, in November, raising $78 million.

This follows an agreement with Córas Iompair Éireann (CIÉ). CIÉ is the State-owned public transport company, with activities encompassing rail, coach and bus services and the agreement permits the use of CIÉ railway lines as the basis for a new national telephone network. Esat Telecom is also developing its own high-speed broadband network within Dublin. In an announcement on June 30, 1997, Esat is constructing an alternative telephone network for business users, including fibre optic rings in several Irish cities and ATM infrastructure. Public payphones and the development of residential service capacity are also intended. Esat is already targeting the residential market for international calls.

Two new services were launched following the ODTR's 1997 SwitchLink Decision, enabling both residential (Swiftcall and Esat Home) and commercial (Swiftcall) to access cheaper international calls. For residential customers, both Swiftcall and Esat Home services require either the use of prepaid charge cards, or the prepayment of calls from domestic telephones, made by dialling the number of a freephone service centre.

Following the liberalisation date of December 1, 1998, Esat has offered residential services under the brand ‘EsatClear’, with per-second billing, cheaper charges (including a flat rate internet account and access charge). Esat Clear is targetted only at Telecom Éireann customers whose bills exceed £100 (EUR 127) every two months. This may well be a result of the limited penetration of the Esat network (n common with that of all other operators other than Telecom Éireann), but has led to a convenient cherry-picking strategy.

3.3 Independent Telecoms Group (ITG)

This public limited company has 71 street payphone sites with 2 payphones on each site. It recently completed the purchase of the Telephone Company of Ireland, a company with 500 telephone sites in private locations. ITG now has almost 2,000 payphones around the State, a 23% general payphone market share. ITG is also a telecommunications network installation and credit card terminal services company and has been contracted to supply the telephone network for TV3, the State's new television station. With the acquisition of the UK companies Telecentral and Integrated Cash Register Products (ICRP), ITG is also aiming to expand into the UK payphones and ancillary telecommunications services markets.

3.4 Ocean

The State-owned Electricity Supply Board (ESB) announced a joint venture with British Telecom (BT) on Tuesday December 9, 1997. The establishment of Ocean as the vehicle for this venture was a lengthy and long awaited process, launched on June 22, 1998. The company is a 50:50 joint venture, although the ESB’s shareholding includes a 40% stake by the American International Group ("AIG"), a financial and insurance services company. Ocean is expected, like Esat Telecom, to offer the strongest competition to Telecom Éireann. The company will have immediate access to the ESB's digital microwave and electricity supply networks as well as integrating with BT's "Concert" network.

As with Esat, a residential service is now being offered.

3.5 Telenor

Telenor and Bord Gáis, the State owned natural gas company, are understood to be in discussions regarding the development of telecommunications infrastructure. Bord Gáis has stated that it has received approaches from several international parties interested in forming alliances. Pipe networks in Dublin Cork, Limerick, Waterford, Kilkenny, Drogheda and Clonmel are still in existence, although they are not part of the current natural gas network.

3.6 WorldCom

WorldCom Ireland is part of MCI WorldCom. while the company has a small physical presence in Ireland, its revenues are currently estimated to be worth around $10 million per year, based upon international and long-distance telecommunications services for urban corporate customers. WorldCom is constructing a fibre-optic ring in the City of Dublin, linking the International Financial Services Centre to a number of business parks, and a new public switch. TCL Telecom, an Irish VAS provider, was bought out in November 1997 by WorldCom. UUNET, an ISP subsidiary of WorldCom, is also to establish a presence in Dublin.