Silence from Telecom on Interoute
Lawsuit - June 8th, 1999
- Interoute Determined to sue Telecom Eireann for £3 million
New telecoms company Interoute plans to sue Telecom Eireann for at least £3 million due
to the delay in putting in place interconnect paths to link it to Telecom Eireann's
network. The delay has resulted in a loss of revenue for the new telecoms operator in
addition to a loss of significant market share.
David Ryan, Chief Executive of Interoute said that TE seems to be obstructing new players
in the market by delaying the completion of interconnect paths. " The last thing they
want before the flotation, is for a competitor to emerge with extremely competitive
pricing" he said. "BT, Deutsche Telekom and AT&T were all public companies
when deregulation occurred. TE is in a unique position in this regard as a private company
in a deregulated market and it is not unrealistic to speculate that this delay might be an
attempt at thwarting the efforts of competitors."
He also assigns blame to the TE technical division, which he claims is under resourced and
unable to cope with the demands put on it to interconnect competing telecommunications
companies. "TE should have been prepared for the demands of liberalisation and had
the manpower in place to effect the interconnection. By under resourcing their technical
department TE are abusing their power as a significant market player" Ryan added.
Interoute received the first general telecommunications licence for provision of voice and
data networks to the Irish market last December. At this time Interoute were told by TE
that there would be an initial "maximum" 16 week delay before the interconnect
paths were completed. This was accepted by Interoute as legitimate however to date no such
connection has been effected.
As a result of these delays Interoute have suffered significant losses. To establish a
market presence, Interoute launched the Spirit prepaid phone card in early March. The
traffic for this service was to be temporarily carried by another interconnected operator,
however due to the delay, Interoute is still dependent on this operator to carry the
traffic at a loss of £10,000 a week. This has also meant that Interoute has not been able
to offer the competitive prices it wishes to. Additional real losses are also estimated at
another £500,000 in non-productive staff, equipment and leases. The most substantial loss
Interoute has suffered is the loss of prevalence in the market and revenue in what are the
most critical months in the post liberalisation calendar. Interoute will seek at least £3
million in damages from the state operator in order to recoup these losses.
Interoute served a letter to Telecom Eireann on May 31st seeking compensation for actual
damage to date and asking that the links would be completed by 7th June. There has been no
contact from TE to date. " Trying to get times and estimates out of them is proving
as hard as ever" adds Ryan. " However we are more determined than ever to make
sure consumers get the real choices they deserve and end this ridiculous monopoly."
Further Information:
Jill Forde, Interoute Ireland.
Tel 01-6617360
email: jill.forde@interoute.ie
Interoute Ireland
Hambleden House
19-26 Lower Pembroke St
Dublin 2
Many thanks to Jill Forde Of Interoute Ireland for the kind permission, for allowing me to re-produce this article for inclusion on this site. If you'd like to know more about Interoute Ireland then check out their website at www.interoute.ie