Eir announces a price increase to its services- Kildare FM

Image audioEir announces a price increase to its services- Kildare FM

The Central Statistics Office (CSO) has announced that inflation has skyrocketed to 7.8% in May, meaning inflation is hitting its highest rate in 40 years. Prices are increasing across the board, which can be seen in particular across the telecommunications market.

Now that broadband, phone and TV provider, Eir, has announced its plan to raise its prices for the foreseeable future, Daragh Cassidy, Head of Communications at bonkers.ie, explores this unusual price increase and anti-competitive behaviour in the telecommunications industry.

Eir is set to increase its prices

Eir has announced that it will be increasing the cost of most of its products, such as landline and broadband, each year from April 2023. This price increase will be based on the rate of inflation in January, plus an additional 3%.

These price increases are set to impact 25% of its customers from August. The changes in Eir’s fees will impact households and small to medium-size businesses that use the company's landline, broadband, TV and phone services.

Seeing that inflation is currently resting at around 8%, it means that some people will see their prices with Eir increase by about 11%.

Therefore, if you are paying 100 a month, you will be paying an extra 11 on top of that per month.

Are broadband, phone and TV suppliers price-signalling? 

It does seem as if the broadband suppliers are price-signalling each other, which means suppliers are telling the market what their prices are going to be.

It is frowned upon as it allows the other providers to follow suit and increase their prices, which is what we have seen from Three, Vodafone, and now Eir. 

In financial services price-signalling is illegal and the Central Bank of Ireland cracks down quite heavily on it.

Yet the communication providers seem to be able to get away with it.

However, Eir has stated that the reason behind its price increases is to ensure it remains competitive whilst also continuing its significant investment program.

Can I shop around for another broadband and phone provider?

Yes, you can. 

We would always encourage people to shop around and look for the best value broadband plan on the market. However, we understand that this may be more complicated for people living outside of urban areas such as Dublin, Cork or Galway.

Eir is currently the main provider of fixed lines and mobile services in Ireland with 2 million customers. So for people living in certain rural areas, they may have no choice but to stay with Eir as they do not have access to other broadband providers.

This could lead to communication poverty for those in rural areas who can not afford Eir’s new prices and do not have the option to switch providers.

What makes Eir’s price increases so unusual?

What is unusual about these price hike announcements is that Eir is forecasting that it will have to continue to raise its prices for the foreseeable future. This is price-signalling.

Eir is essentially saying that there will never be a price decrease for their services.

Could this price-signalling from telecommunication providers backfire?

It is possible that these continued planned price increases could backfire on telecommunication companies and result in a loss of customers.

We saw this happen with Netflix after it increased its prices. However, the problem here is that all telecommunication companies are increasing their prices.

This makes it very difficult to save money which is why I think we are seeing anti-competitive behaviour from these providers.

If other companies like Sky or Virgin Media come out with price increases, then it will discourage people from shopping around if everyone is just hiking up their prices.

Can I opt-out of my plan with Eir?

Yes, you can.

Eir has stated that all customers affected by this price increase will be notified in writing and you will have the option to opt-out of your broadband plan with Eir for no additional charge.

Are these price increases happening in the UK too?

Although prices are increasing everywhere due to inflation, the cost of broadband and phone plans are not increasing in the UK as they are in Ireland.

This is because there is more competition in the UK between providers.

However, I must stress how unusual it is for so many of the telecommunication companies in Ireland to announce unending price increases at the same time. It is highly unusual and it does not sit well with me. 

It comes across as collusion and anti-competitive behaviour. 

Switch broadband providers on bonkers.ie

Seeing that many of Ireland’s main broadband providers are beginning to increase their prices, it has never been more important to be signed up for the best value plan available to you.

On bonkers.ie you can easily compare the different plans on the market in seconds with our free comparison tool.

You can also compare energy, banking, and insurance deals with the help of our other comparison services.

Check out our broadband guides

If you want to lower your broadband, TV and phone costs read some of our articles on the topic:

Keep up to date with the latest broadband-related news by reading our blog and guide pages.

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