Cable & Wireless, which employs 200 people in Ireland, yesterday announced plans for a £30 million investment here over two years, which will see the company enter the market as a carrier of telecommunications traffic.
Meanwhile, Telecom Eireann, which announced major reductions in interconnect charges - the rate it charges other operators to deliver calls over its network - will have to submit further information on its levies to the elecommunications regulator today. It has also emerged that the company, which made great play of the reductions, will not be in a position to offer new interconnect facilities at some exchanges because it has not installed the necessary equipment. This has come as a major surprise to the other service providers.
This week's frenzied activity on the telecoms front has been spurred by the impending deadline of December 1st for full deregulation of the market, when even the residential market opens up.
Cable & Wireless announced a somewhat complex restructuring of its operations in Ireland yesterday which will see it enter the corporate market as a carrier of telecoms traffic. It will still retain its existing operations which include a telecoms equipment business (Cable & Wireless Ltd) and the networks business Cable & Wireless Services Ltd.
Mr Tony Geheran, head of Project Ireland with Cable & Wireless Communications, said his company would spend £14 million of the £30 million buying these two businesses from Cable & Wireless plc, the parent company. He said it would enable it to offer a one-stop shop of data, mobile and voice solutions.
He said the company would be targeting "the whole business market", including small and medium firms, which had the biggest growth potential. Cable & Wireless had around 3,500 existing customers in Ireland and it hoped to build on their loyalty. Mr Geheran said Cable & Wireless's services in Northern Ireland and the Republic would now all be run under a single brand. The company would be investing £16 million in infrastructure over two years, he said.
This will include a distribution network in Dublin, a trunk network and laying fibre to some industrial estates. Mr Geheran added that he expected additional jobs would be created through this new venture. It is separate from a previously announced plan to employ 100 people through a project in Shannon.
Meanwhile, industry sources have expressed surprise at the fact that interconnect will be delayed at some exchanges because Telecom Eireann does not have the necessary equipment in place. It is understood that the company is trying to rectify the problem, but one source accused it of very poor network planning.
Interconnect rates are a vital issue for Telecom's competitors, such as Esat, Ocean and MCI/WorldCom, because it helps them determine their own margins when trying to offer competitive rates. They have always maintained that Telecom's rates were far too high. Esat appealed the matter to the European Commission and its decision is due next week.
Telecom is also due to submit more information to the Director of Telecommunications Regulation, Ms Etain Doyle, on what it proposes to charge its competitors for running cables from its exchange to the competitors' clients premises, as part of the interconnect regime. It is understood that Ms Doyle felt that Telecom had not fully justified its proposed charges.
Other issues Ms Doyle is due to get information on today include interconnect rates regarding international calls, directory enquiries and other operator services. A decision on these issues is expected shortly.
