Broadband prices in Ireland are set to increase whilst UK consumers are seeing price reductions, it was claimed today.
Dave Mc Donald, CEO of Nova Broadband, suggests that even urban dwellers in Ireland face high prices as providers recoup huge costs for rural networks from all users equally.
“Firstly, the reason entry-level fibre broadband is 33% more expensive in Ireland than the UK, is that it costs far more to provide broadband here due to the high level of rural connections,” he said.
“The spectre of low population density, combined with rampant ribbon-development and poor planning decisions has come back to haunt us yet again.”
ESB electricity connections are priced higher in rural areas than urban areas, because of the higher cost of provision. Broadband prices, however are “postalised” across the nation, meaning that users will pay the same price to broadband providers using Open Eir’s infrastructure to provide fixed-line broadband in an urban or rural setting (provided you are within coverage) resulting in urban broadband users effectively subsidising rural users.
“Yet another price hike is on the cards as Eir’s wholesale division, Open Eir revealed this week they will be increasing their line cost by €3.50 per month in September – an increase which has been rubber-stamped by ComReg,” said McDonald.
“At current retail prices, broadband providers will be operating on a margin of less than €1 per customer per month and as a result, retail prices for fixed line broadband will have to go up even further.
“Why are Open Eir increasing their prices? We know that they are embarking on a huge build-out of rural fibre broadband, costing €400m over the next five years and they have the get the money from somewhere.
“Assuming the National Broadband Plan finally gets off the ground, citizens will also have to pay through general taxation, whether they live in rural areas or not, to fund the delivery of (probably fibre optic) high-speed broadband to 100% of rural locations.
“The irony is that the rural connections will most likely be significantly faster than the urban connections of those who are subsidising them.
“In addition to this, by going for 100% coverage with the National Broadband Plan rather than say, 95%, coverage, the burden to the taxpayer will be probably doubled, just to get to the most difficult last 5%, who will not have to pay extra for connection.”
