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Eircom

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eircom, formerly Telecom Éireann, is the former State telecommunications operator of Ireland. As Telecom Éireann, the company was a state monopoly; as a private company it continues to dominate many telecommunications areas, its main competitor being Esat BT. eircom currently operates the fixed-line telephone network, act as an internet service provider (ISP) eircom.net, and operate a property alarm installation and montioring unit called eircom Phonewatch. An analogue TACS and a digital GSM 900 network operation in Ireland, started as Eircell, was once owned by eircom. It is now run by Vodafone. eircom now has a 44% share of the Irish telecoms market.

Contents

Privatisation

Due to EU laws requiring the opening up of the Irish telecommunications market, eircom was privatised, a process which began in 1995, and by July 1999 the government had disposed of virtually all of its shareholding [1] (http://www.oecd.org/dataoecd/30/57/2510988.pdf). eircom was then floated on the Dublin, New York and London stock exchanges on July 8 1999 and small/first-time investors were encouraged by the Irish Government to buy shares.

The eircom flotation is considered to have been an example of a stock market bubble - after the initial hype of the flotation died down, the stock price fell rapidly. Many of the 500,000 small investors were angered by the significant financial loss they incurred, blaming the government for not sufficiently warning them of the risks inherent in stock market investment. Mary O'Rourke, as the minister responsible for eircom, lost her seat in the 2002 Irish general election largely because of this public anger over the eircom flotation.

Competition

While eircom retains a virtual monopoly on fixed line telephony in the State (the only exception being those operated by cable company NTL - Chorus previously offered wireless telephony but failed to renew their licence) it is required to allow carrier pre-selection (CPS). Introduced in Ireland in 2001, CPS allows subscribers to use an alternative provider for all their calls, without the need to dial indirect access codes or numbers, although they still receive a bill from eircom for line rental. However, under a wholesale line rental scheme, it will now be possible for customers, especially business ones, to have a single bill from an alternative provider, rather than continuing to receive one from eircom.

Criticisms of eircom

Ireland continues to lag behind in terms of broadband availability. As of 2004, eircom's PR division runs near-daily advertisements for broadband connections on national media. It has been suggested that this is more to ensure that politicians, local community groups and the public at large feel that Ireland is being connected, rather than advertise available services (A large part of the population cannot take up the broadband deals).

Before eircom announced ADSL it started a telemarketing campaign aimed at customers who spent large amounts of time on dial-up connections to persuade them to subscribe to ISDN - an old inferior technology. This technology, which is not available in all areas is an alternative, albeit expensive option, in some areas where broadband is not available and ISDN is.

eircom, like most ISPs, has been accused of failing to prevent spam. eircom have introduced a spam/virus filtering service called email protector. However, it is a subscription service of €2 extra per month.

eircom's corpoprate structure has been subject to criticism in recent years, with accusations of poor management and overstaffing levelled at it.

After the privatisation of eircom, the highly profitable mobile phone division, Eircell, was sold to Vodafone. Some consider this act to be asset stripping by the large investors with interests in eircom.

Broadband Roll-out

After a slow start broadband subscriber numbers started to pick up in 2004 when eircom cut the price for the basic DSL service and launched an intensive television advertising campaign. eircom predict 100,000 DSL connection by year end 2004 and promise to announce ambitious further growth targets in 2005. They have stated that their strategy is to strongly grow broadband user numbers and re-enter the mobile market. Copying a similar scheme to that used by BT in the UK, they have introduced a trigger scheme for DSL enabling their smaller exchanges based on numbers of users committing to sign-up for service. BT has now discontinued this scheme, and is moving to upgrade all remaining exchanges in the UK to ADSL during 2005, (including Northern Ireland, which has the highest number of exchanges upgraded to broadband in the UK).

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