Ireland: Crystal Ball Gazing? Comreg Draft Strategy Statement 2014-2016

Last Updated: 16 May 2014
Article by Helen Kelly and Nina Cummins

ComReg is required to publish a strategy statement every two years setting out, inter alia, its strategic priorities for the next two years and how ComReg proposes to achieve these.  There are no real surprises in the current draft Statement, with ComReg identifying the following four high-level goals for 2014-2016:

  • Protect and empower consumers
  • Promote sustainable competition
  • Facilitate innovation, investment and the internal market
  • Be an effective and agile organisation

However, as with everything the devil is in the detail.  In achieving these goals, ComReg will have to strike a careful balance between maintaining the ongoing increase in retail competition, and at the same time encouraging increased investment at a wholesale level particularly as regards Next Generation Access (NGA) networks. 

Key trends in the Irish telecommunications market

The draft Statement provides a useful summary of key trends in the Irish telecommunications market along with ComReg's approach to date and its proposed strategy going forward.  Those familiar with ComReg's Quarterly Key Data Reports will already be up-to-speed with most of these trends, which include:

  • the continued growth in use of IP-based services and increased take up of advanced services and over-the-top applications (eg, Skype, WhatsApp) 

The ongoing pressures on the Irish economy are expected to further underline the prevalence of these IP based low cost / free services over the next few years.  In terms of regulatory challenges, ComReg has indicated that it will consider the implications of VoIP services on the framework for regulation of wholesale and retail services.  With this in mind, it seems a consultation can be expected although the timing is unclear given the number of other consultations currently in the pipeline.  

  • the increased demand for high speed data services in both urban and rural areas and how the Government's next National Broadband Plan might serve to narrow the urban/rural gap 

eircom and UPC have already made significant investments in NGA/fibre networks able to support high speed broadband. To date ComReg has largely relied on private sector competition to drive network investment and constrain retail prices. However ComReg recognises in its draft Strategy that there is not the same case for commercial investment in less densely populated areas and that additional support may be needed in the form of State funding so as to avoid a widening of the urban / rural gap.  Those active in the provision of broadband services should take note however that ComReg has stated it will commence a market analysis of the markets for Wholesale Physical Network Infrastructure Access (WIPNIA) and for Wholesale Broadband Access (WBA) during 2014/15 which may lead to additional remedies in these markets (particularly on costing and pricing).

  • the growing popularity of triple / quad play bundles

eircom was the first to launch a quad-play package in October 2013, but ComReg expects this trend to continue.  Although bundling may be good news for consumers, it brings with it a number of regulatory challenges.  A key challenge for ComReg at the wholesale level will be to ensure that the different competitive conditions which exist in the each of the markets for the individual (component) services (eg, telephone, TV, broadband, mobile) does not lead to unintended spill-over effects.  This may occur where an operator with significant market power (SMP)  in the market for one of the component services leverages its position of dominance into the market(s) for the other component services. At a retail level, ComReg will need to remain vigilant that bundling does not lead to unintended consumer 'lock-in' or otherwise deter consumers from switching.

  • Market entry or exit and the impact this might have on competitive conditions

ComReg makes specific reference to the following developments.

The Electricity Supply Board (ESB") has announced its desire to enter the local access market by building a fibre-to-the-home network in Ireland using the existing electricity distribution network.  Please see article n.4 below "Legislation enables the electricity distribution network to be used for telco purposes".

The proposed acquisition of Telefónica Ireland (O2 Ireland) by Hutchison 3G Ireland (Three) which is currently subject to Phase II merger control review by the European Commission.  Readers of our previous eZines will be familiar with this transaction, which is also updated in this issue.

The draft Statement also sets out ComReg's proposals in a number of other areas such as: (a) consumer protection and ComReg's enhanced enforcement powers to give effect to the principles in the Consumer Rights Directive as regards customer contracts and switching; (b) the continued number of complaints regarding premium rate services (PRS) and the regulatory challenges faced by new forms of technology over which PRS are delivered; and (c) the proposed release of additional spectrum in the 700 MHz and 2.6 GHz bands.

The consultation period runs from 17 April until 22 May.  Operators wishing to have their say on ComReg's views on the industry and the priorities set should submit comments to ComReg by 22 May (click here for the four consultation questions to which operators should respond).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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