The Government is to be commended for its unexpected decision to abolish Telecom Eireann's voice telephony monopoly well ahead of schedule. Under a derogation secured in Brussels, the monopoly could have persisted for another year, but the Cabinet decided to press ahead with deregulation last week. It is a well-judged and sensible initiative which sends precisely the right signal to the business community and to potential investors in this State. Increasingly, Telecom's monopoly on voice telephony was becoming something of an anachronism in a State which markets itself as an international centre of advanced telecommunications - and one which provides an unparalleled level of support services for industry. The concern shared by Government and the IDA was that - from the perspective of some potential investors - the continuance of the monopoly placed the Republic on a par with some of the lesser developed EU states. The Minister for Public Enterprise, Mrs O' Rourke, wanted, quite rightly, to ensure that Ireland's international image was that of a fully-liberalised economy in the vanguard of technological and market changes.
The low-key political response to the Government's measure is welcome evidence of a new maturity in relation to the semi-state sector. This Government is carrying much less ideological baggage about the semi-states than some of its predecessors. There is a new pragmatism and a clearer focus on doing what is best for the company, for business and, not least, for the consumer.
Competition in the industry will bring major benefits for the consumer. Telecom has reduced its long distance and international charges appreciably in recent years, but some call charges are still costly. Local calls, which are offered free or at a nominal rate in some countries in order to boost the usage of the Internet and other value added services, remain among the most expensive in Europe under Telecom's charging structure. The hope must be that increased competition will drive down call charges, in much the same way that the demise of the effective Aer Lingus monopoly drove down air fares between Ireland and Britain. Indeed, competition from private companies such as Esat Telecom has been a major factor in the reduction in long-distance charges.
With data communications traffic increasing by some 12 per cent a year, there are grounds for optimism that even a relatively small market like that of the Republic will sustain business for a number of telecommunications companies, some of which will offer general services while other target niche sectors. In this regard, the role of the telecommunications regulator, Ms Etain Doyle, will be crucial. She must design a interconnection agreement, establish the rules by which customers of one company can use the network of the other - as well as how much it must pay its competitor. There is also the question of how Telecom Eireann can be given credit for the infrastructure that it has built up over the years. The underlying objective should be clear; to provide a new telecommunications environment in which Telcom is fairly placed in relation to the work it has done to date and a level playing field in which a plethora of telecom companies can flourish.