Tuesday, 21 February 1995
Dáil Éireann Debate
10. Mr. S. Brennan asked the Minister for Transport, Energy and Communications the way in which he intends to provide the £1 billion estimated by the IDA to be required by Telecom Éireann over five years to maintain the international competitiveness of the economy.[3780/95]
Mr. Lowry: Telecom Éireann has concluded that it will need to invest in the order of £180-£200 million per year over the next five years. This investment is necessary to keep pace with technological advances and provide a wider range of services as well as catering for growth and improved competitiveness.
The telecommunications business is inherently profitable for efficient operators.The company has made clear that it proposes to fund its investment programme without taking additional borrowings on board. This is the way it has managed its finances in the past five years. There will, of course, be a contribution of £27 million over the next five  years from the Structural Funds programme.With the exception of limited funding received from European Union programmes, the company has to date funded its own investment programme and that situation will continue. There is, therefore, no question of capital investment funds being provided by me. My flexibility to provide such funds would be severely constrained by our European Union obligations.
I await submission of the next five-year corporate plan by Telecom Éireann and I am not in a position today to give precise indications as to its investment plans over that period. The company has, however, indicated that its investment requirements will be, broadly speaking, in the range suggested by the Deputy and that it intends to fund this investment without recourse to additional borrowing.
Mr. S. Brennan: I am sure most people will be surprised to learn that Telecom Éireann can find £1 billion internally over the next five years. Has this anything to do with the fact that Telecom Éireann's charges are 30 per cent higher than the EU average and 30 per cent higher than the UK official figures?Given that it is able to find £1 billion over five years without recourse to the Exchequer, does the Minister propose to tell Telecom Éireann that imposing charges which are approximately one-third higher than the rates in other countries is not acceptable and that he will not approve the investment of £1 billion unless it brings its charges into line with those in the rest of Europe?
Mr. Lowry: The rates to which the Deputy referred were fixed by his colleague when he was in Government. There are only two ways in which the telecom sector can be funded—by the taxpayer through Exchequer funding or through Structural Funds. The Deputy's colleague in Government made the allocation under the Structural Funds programme.The outlook for Telecom Éireann in terms of finance does not  have to be bleak. The reality is that, with its partners in Europe, Telecom Éireann is operating in a sector which is both profitable and experiencing growth. I am satisfied, from the information provided to me, that Telecom Éireann will be able to fund any development from within its own resources without having to increase charges to the consumer unduly.
Mr. S. Brennan: I was suggesting that perhaps the Minister would not sanction the £1 billion investment until Telecom Éireann agrees to reduce its rates but that is a matter for the Minister and I will pursue it another way. Is it proposed to sell off any part of Telecom Éireann in the near future?
Mr. S. Brennan: Everybody else in the country seems to know what I am talking about; I am referring to the mobile network, the talks that are taking place with AT&T, Cable and Wireless and nine or ten other groups throughout the country. I will send the Minister the newspaper cuttings if he so wishes. I understand there are proposals to sell off a part of Telecom Éireann. Is the Cabinet which is comprised of three parties united behind this decision?
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