The Government spent many years persuading our EU partners to allow the Irish telecommunications market to remain protected from full competition until the year 2000, when most other European markets were fully liberalised from January this year.
Its decision to change direction and end the derogation this year shows that it has now decided that Ireland must open up its market fully to benefit from the telecommunications revolution. As IDA Ireland and business lobby groups have pointed out, there is little point in selling Ireland as a location for advanced telecommunications projects, while at the same time keeping the home market protected and thus stifling investment in infrastructure.
The move means that international telecommunications giants such as Worldcom and local firms such as Esat - up to now restricted to offering long-distance and other telecoms services to the business community - will be able to compete with Telecom Eireann in all sectors of the business, including residential usage.
They had been restricted to a market valued at some £200 million, but will now be able to compete in the full £1.2 billion Irish telecoms market.
Esat, which has invested heavily in building a telecommunications infrastructure appears the best placed to start offering a range of
services in competition with Telecom. Esat's new fibre optic network on CIE lines is due to switch on in June, which, combined with its existing investment in cities, will leave it with a national network.
The end of the derogation may also lower the cost which Telecom charges other operators for connections to its own network. The inevitable result will be more competition and falling prices This should address the concerns of the National Competitiveness Council, which warned that local calls with Telecom during the day were very costly, which retards Internet use and damages competitiveness.
Business will welcome the move, while the IDA will hope that it will position Ireland to attract a whole new range of projects in the area of electronic commerce, by leading to new investment in advanced telecoms services and lowering the cost of access to the Internet.
But industry sources say a lot of issues will need to be sorted out before the market is deregulated and both Telecom and the Department of Public Enterprise will have to work hard if everything is to be ready in time. In addition to legislative issues such as licensing Telecom, technical and logistical issues such as programming Telecom's switches will have to dealt with.
But even before these are sorted out, the very announcement that the derogation is to end has heralded major change in the sector
