Eir complains to EU about ComReg’s decision to restrict its wholesale fibre broadband offering

Ireland’s largest telecoms company Eir has lodged a complaint with the European Commission about ComReg’s recent decision to restrict its ability to offer discounts for its wholesale fibre broadband service over the next five years.

In a market access review published on November 14th, Irish regulator ComReg once again designated Eir as having “significant market power” (SMP) in the market for wholesale central access to fibre broadband.

ComReg’s decision means Eir would be obliged to provide products and services at regulated wholesale prices to rivals who do not have networks or who have insufficient network coverage of their own. This is designed to allow them to compete in providing retail fibre broadband services to homes and businesses.

In its report, ComReg said Eir had the “ability and incentive to potentially engage in anticompetitive behaviours”, to deny other providers access to its network and to “engage in pricing and other behaviours which could restrict or distort competition”.

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The decision puts a floor on what Eir can charge for access to its wholesale fibre broadband network while rivals would be able to undercut it on pricing. Wholesale accounts for about a quarter of Eir’s revenues.

In its complaint, Eir claims ComReg made a number of errors in its market analysis and did not take into account plans by Virgin Media and Siro (a joint venture between ESB and Vodafone) to invest in their own fibre-to-the-home (FTTH) networks over the five-year period.

Eir claims ComReg’s desire is to continue to regulate Eir regardless of the realities of the current market. It argues that Siro’s roll-out has already reached 535,000 premises while Virgin Media has exceeded 300,000 premises.

Earlier this year Virgin Media announced its intention to reach a million premises with fibre by 2025, with a €200 million investment that is designed to replace its cable network. Virgin Media also recently signed a wholesale contract with Sky Ireland, which Eir argues is another signal of its strong position in the market.

Eir has spent more than €1 billion over the past five years on its fibre broadband and mobile networks. Its FTTH currently passes more than 1.1 million homes with Eir announcing plans to spend an additional €1 billion over the next four years to extend that figure to 1.9 million premises.

Eir chief executive Oliver Loomes said ComReg’s decision would prevent it from offering discounts to wholesale customers. “We will have at least a hand tied behind our back in that we can’t discount our prices while other competitors in the market can do whatever they want with our prices,” he said.

“That doesn’t seem right, or fair or balanced. We disagree with ComReg and we’re asking the commission to intervene.”

When asked if Eir might pause its investment plans for fibre were the commission to agree with ComReg’s analysis, Mr Loomes said: “We’d need to take a good look at our plans. We want to continue to invest to get to 1.9 million homes. I don’t want to pull investment ... all we want to be able to do is to compete fairly in the marketplace.”

ComReg was required to lodge its review with the commission, which has one month to give its view of the Irish regulator’s analysis.

In its draft decision, ComReg stated that it “intends to closely monitor market developments” over the review period, and that it could undertake a “fresh market review earlier than planned” if market conditions were to change.

In its complaint, Eir said it took no comfort from this commitment, noting that ComReg had failed to undertake such reviews in the past.