'Super-connected' consumers won't save sector, says watchdog
Published 17/04/2010 | 05:00
Telecoms watchdog Comreg has said the country is entering the era of the "super-connected" consumer, but that falling revenue and profits pose a dilemma for firms that have to meet growing demand for better products.
The comments were made in Comreg's new draft strategy document published yesterday, which sets out the regulating office's plans to the end of 2012.
It said that Irish consumers spend an average of 13 hours a week on the internet, and that they are increasingly demanding access to content, such as video, that requires faster and more reliable bandwidth.
"While the demand for bandwidth is growing strongly . . . revenues and profits in the industry have been falling," according to the document.
"The willingness of consumers to pay a significant premium for faster speeds is not so clear cut," it warns.
Total revenues in the sector, which includes telecoms firms and television subscription companies, fell 10.6pc to €4.03bn last year, according to Comreg. That comes as operators are forced to cut prices due to competition, but also as consumers cut back on usage.
Comreg noted that consumers are increasingly willing to shop around, with more than 174,000 consumers having used the agency's callcosts.ie website last year to analyse various telecoms packages.
But Comreg also noted that the sector is likely to play an "important role" on the road to recovery, as a result of its own contribution to GDP and wealth and job creation, but also for the opportunities advanced to communications networks present for firms to become more competitive by streamlining.
Parties have until May 14 to make submissions regarding the draft strategy document.