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Irish Independent
Irish Independent
Charlie Weston Twitter Email

Competition watchdog to probe phone providers' price guidance

Eir CEO Oliver Loomes. From next April, Eir will annually increase the cost of its plans by the rate of inflation in January each year plus 3pc

The State’s competition watchdog is to examine whether advance warnings of price rises by telecoms providers Eir, Vodafone and Three Mobile is a potential threat to competition.

The move comes after all three said they will now move to increasing their prices every year at a set percentage, plus the rate of inflation.

Consumer advocates have claimed this amounts to price signalling, something that is banned under Irish competition law.

Price-signalling is an anti-competitive practice where businesses make their competitors aware that they intend to hike prices.

The Competition and Consumer Protection Commission, which polices competition law, has come down heavily in the past on businesses that make public statements on price rises.

It recently forced the State’s six motor insurance companies to sign legally binding agreements to reform their internal competition law compliance programmes after a five-year long investigation into alleged “price signalling” by insurers.

The Irish Independent revealed last week that from next April, Eir will annually increase the cost of its plans by the rate of inflation in January each year plus 3pc.

The State’s largest telco, whose CEO is Oliver Loomes, said these price increases will apply on the full monthly price plan before discounts.

The consumer price index inflation measure is currently 7.8pc, which would mean an Eir price rise of 10.8pc if inflation is that high in January.

This is a similar move to Vodafone and Three Mobile, which have said they plan ongoing rises.

Vodafone Ireland has introduced a minimal annual price increase of at least 3pc for new mobile bill pay customers and bill pay clients who upgrade or renew their contract.

Three Ireland is increasing the monthly charge on its bill pay price plans annually by 4.5pc.

Daragh Cassidy of price comparison site has queried with the Competition and Consumer Protection Commission if the move to inflation-plus annual price rises does not amount to price signalling.

Mr Cassidy said there was a fear now that Virgin Media, which provides landline and broadband services, and Sky TV, which also provides landline and broadband services in this market, will introduce similar inflation-plus annual price rises.

Chairman of the Consumers’ Association of Ireland Michael Kilcoyne said it was not in the best interests of consumers to have businesses move to set annual price rises.

“It is distorting competition. If they are all going to have annual rises made up of a set percentage plus the inflation rate, who is going to give value to the consumer?’ Mr Kilcoyne said.

“What is the point in competition if they are moving automatic, annual increases?”

The Competition and Consumer Protection Commission (CCPC) said it actively engages with traders and trade associations that make public statements regarding price increases.

It said that in certain circumstances this may amount to price signalling that breaches competition law.

Asked about the move to annual inflation-plus price rises, it said it and the telecoms regulator, ComReg, have concurrent competition-law powers in the telecoms sector.

“CCPC will be liaising with ComReg in respect of any conduct that may be of concern,” the competition watchdog said.

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