Telecoms Monopoly Smashed - 18th August, 1999
-Price war between Telcos imminent as
Interoute enters the residential market

Real liberalisation of Irish telecommunications began today (Wednesday 18th August) when new entrant Interoute Telecom launched its new Spirit residential phone service. Interoute has pledged to finally bring deregulation to the Irish consumer nine months after deregulation occurred. The new pricing structure massively undercuts those of incumbent Telecom Eireann and other licensed operators such as Esat and Ocean. It is expected that Interoute's attack on overpricing will begin a vicious price war in an effort to win the loyalty of the Irish home phone user.

Spirit has now raised the stakes in the Irish telecommunications industry with the introduction of dramatically low pricing on all international destinations. Home phone bills are set to drop as Spirit undercuts competitors by up to half in some cases. At present people are paying 150% to 200% more than necessary for long distance calls. Among Spirit's lowest rates are Australia and New Zealand for 19p a minute, the USA for 12p and the UK for 9.5p. Spirit aims to be as clear and transparent as possible to customers offering just one price all day, seven days a week on all international calls. Interoute has guaranteed to have clear honest tariffing which will affect other operators prices adversely.

The new service will be widely available to the Irish phone user, with no credit score system. Both prepaid and pay by bill options will be available to those wishing to switch phone service.

"We refuse to see the consumer suffer inordinate and unnecessarily high telephone bills. Unlike our competitors we will not join the old boys high margin club, instead we will bring the real and actual cost of telephone calls to the consumer" said David Ryan, Chairman & CEO of Interoute and Spirit Telecom. "Consumers have clearly not benefited from deregulation thus far and we want to finally bring the real benefits of deregulation into people's homes." -mf-.

There has been little uptake of alternative telecoms services in the nine months since liberalisation. The reason behind the lack of transfer from TE to alternative telecoms companies is, Ryan feels, a direct result of their confusing pricing structures. "The guy on the street does not comprehend the peak, off peak, weekend tariffs and asterisks that are part of the present telecoms pricing structures. I don't understand their tariffs - so what hope has the consumer got - and I'm in the telecoms business." He added, "Although millions have been spent on advertising that there is an alternative to TE, the reality is that these new companies have not provided viable and worthwhile alternatives. Our competitors have informed the public that there is a choice, Spirit is now that choice."

Ryan has vowed to lead the charge personally on price reductions and appealed to other telecommunications operators to follow his example; "This is just the beginning of a long battle to offer the consumer the best value and the final outcome of this battle must be the unbundling of the local loop. Until that day the cartels in Irish telecoms will continue" He added " I appeal to the Minister for Public Enterprise to show her entrepreneurial spirit and let market forces lead the way."

Interoute was the first company to receive a general license last December when the telecommunications market was deregulated. The Spirit phonecard was launched last March and in that time has become the number two operator in that section of the industry. The company now has over 100 staff and has moved to a new 8,000 sq ft premises on Upper Baggot Street. Interoute is currently seeking 60,000 Square feet for a pan-European call centre within a four mile radius on the southern side of the city.

For further information Contact:

Jill Forde,
Interoute Ireland,
Tel: 01-6617360 or Mobile: 087-2393313

Or

Email:jill.forde@interoute.ie
Interoute Ireland
Hambleden House
19-26 Lower Pembroke St
Dublin 2

Or Contact:

Sinead Ryan, O'Leary PR,
Tel: 01-6789888

Many thanks to Jill Forde Of Interoute Ireland for the kind permission, for allowing me to re-produce this article for inclussion on this site. If you'd like to know more about Interoute Ireland then check out their website at www.interoute.ie