The Commission for Communications Regulation (ComReg) said that Eircom yesterday agreed to appoint an independent auditor to investigate whether the firm was continuing to offer illegal discounts to customers. Jamie Smyth, Technology Reporter, reports.
The decision to appoint an independent auditor follows the conclusion of an Eircom inquiry last year into Eircom's pricing of voice services, which found that Eircom was supplying "off book" prices to some of its customers in breach of its telecoms licence and voice telephony regulations.
By supplying "off book" prices - charges not agreed by the telecoms regulator - Eircom may have been able to win business from its rivals by bidding for contracts at levels below the publicly stated regulated prices.
Normally, Eircom's prices are agreed and monitored by ComReg because it is a dominant firm within the telecoms sector.
The outcome of the ComReg investigation prompted Esat BT to file a lawsuit for damages against Eircom, which could be worth millions of euro if it can prove that it lost substantial business due to the discount practice.
This lawsuit is still outstanding and was noted as a risk factor in Eircom's prospectus for its recent €1 billion bond issue. Eircom last year said it had offered illegal discounts to some customers but that this had occurred because of aaccidental systems error and was not a malicious attempt to undermine its rivals.
ComReg said yesterday Eircom had agreed to commission an independent auditor to monitor compliance with its decision notice on "off book" pricing.
The terms of reference of the audit, which have been agreed by ComReg and Eircom, are to monitor Eircom's compliance with its licence conditions and the voice telephony regulations between October 2002 and September 30th, 2003. The auditor will be required to issue a statement on the findings of the review to both parties. This statement of opinion will be delivered before the end of January 2004.
Meanwhile, ComReg said it would continue to review and investigate any suspected cases of "off-book" pricing and would take action as appropriate.
An Eircom spokeswoman confirmed the firm would appoint an independent auditor as part of an agreed process in relation to the compliance audit agreed with ComReg.
