Eircom report massive 86% increase in profits

Sleipnir

Why do people insist on giving Eircon their money?


The telecommunications firm Eircom has reported an 86% increase in its operating profits for the first quarter of this year compared to the same period last year. The company said it made €65m in profit during the three-month period before the costs of a €48m restructuring programme were taken into account. It also said its operating margin was 16%, up from 9% in the first quarter of last year. Eircom chief executive Philip Nolan said the company increased its broadband customer base to around 54,000 during the first quarter and was confident of reaching its target of 100,000 users by the end of this year. "We have announced a very solid set of result for Q1, which are in line with out plans and expectations," he said.

jwt

Sleipnir wrote:

Why do people insist on giving Eircon their money?

Last time I looked the direct consumer contribution to their profits was about 10% there abouts.
But line rent data charges leased lines reslling etc made up the rest.
They own the copper, regardless of who you use Eircom gets a cut.

Annoying isn't it

John

tuxy

Sleipnir wrote:

Why do people insist on giving Eircon their money?

well realy what choice do i have if i want reliable dsl?

Gonzo

not much unfortunately, eircoms dsl is the best in the home-market dsl category if you can look past the tiny cap, however I used my cousins 1.5mb NTL bb the other day and it was real broadband getting nearly 175k/sec, I felt like crying lol, my 512k from eircom almost feels like dialup in comparrison. If you live in Dublin maybe it be best to try and wait out for ntl cable to come, everyone here says its amazing but trust me amazing is a polite word to describe it:) Unfortunatley for me i live in the middle of nowhere and cable broadband will never come to me where dsl is my only option.

eircomtribunal

Gonzo wrote:

eircoms dsl is the best in the home-market dsl category if you can look past the tiny cap

How could that be, when the others are simply reselling eircom's dsl?

P.

Cuauhtemoc

It's not all good news...

From ENN...

Though the broadband news will be well received, the company is continuing to see its entire business shrink, including its data communications and data traffic units. Indeed, the results showed that there was only one significant area where Eircom saw revenues rise: the firm said that turnover from line rental and connections was up 16 percent to EUR133 million, thanks to line rental price hikes earlier this year. Almost a third of the company's sales now come from line rental and connection fees.

Eircom also said that turnover from all voice traffic fell 9 percent to EUR140 million, while sales from both voice and data traffic fell 10 percent to EUR166 million.

jwt

Begs the question "If you were at the helm of Eircom, where would you expect to see an increase in profitability?"

Voice traffic down
Voice prices down
Broadband turnover up but profits down
Leased lines down because of broadband
2bn debt at what? 1/2% apr so at minimum 10 million pa
pension plans
shareholders that are demanding dividends (600 million was it?)

So whats left

Line rent and connection fees
Line rent can't go up again for at least a year if only because Dermot or his sucessor would loose his job.
connection fees?

You can see why broadband is a major pain ITA for Eircom it cuts profits everywhere.

If I was an Eircom beancounter I'd be looking hard at the job section in the paper. It's downhill and getting faster

John

Gonzo

eircomtribunal wrote:

How could that be, when the others are simply reselling eircom's dsl?

P.

eircoms dsl is more stable than the others, its never has downtime and speeds rarely drop below 53k/sec, great pings too 28-45ms ingame to uk. The big downside is the cap which is half that of IOL. UTV i dont trust at all as its service breaks down every few months and doesnt get fixed for ages.

eircomtribunal

Gonzo wrote:

eircoms dsl is more stable than the others, its never has downtime and speeds rarely drop below 53k/sec, great pings too 28-45ms ingame to uk. The big downside is the cap which is half that of IOL. UTV i dont trust at all as its service breaks down every few months and doesnt get fixed for ages.

I am reading with interest that a product that is offered by eircom wholesale works differently for the customer when being resold by eircom, utv or Esat/Bt.
You are saying with certainty the equivalent (speed and contention) dsl package from different resellers would work differently on your line?
Why is that so?
Because the resellers have to organize their own backhaul?

P

seamus

eircomtribunal wrote:

Because the resellers have to organize their own backhaul?

Pretty much. There are also things such as interleaving and other QOS things that the operators can do differently, to tweak their packages.

TCP/IP

Well done Eircom as a shareholder that is good to here maybe a different point of view to other posters in this thread but that is life

damien

The medal is in the post.

Seriously, you bought shares in the recent flotation ? Best of luck with them man.

jwt

TCP/IP wrote:

Well done Eircom as a shareholder that is good to here maybe a different point of view to other posters in this thread but that is life

Sorry ,but which point of view are you referring to?

As a shareholder you are on a winner for the moment. Eircom has always looked after their own shareholders, paid dividends etc promptly and on target. The fact that they do it at the expense of the consumer is just business pure and simple. From that point of view Eircom are a model company to whom lecturers can refer in years to come about how to wring the maximum dividends out of a poor economic situation but excellent strategic situation.

They have played their hand very well continuously for years now and there is no reason to expect them to change voluntarily.

However time and technology waits for no monopoly/incumbent and slowly but surely these technologies are reducing their strangle hold on the market specifically the last mile. As this strangle hold is reduced and eventually removed the profit expectations for Eircom are dismal.

Long term investors do not see Eircom as a good bet and financial journals are echoing that thought weekly and moving closer and closer to calling Eircom a bad risk. (Although no one AFAIK has actually come out and said it)




John

Ripwave

This is what it says on the front page of Ireland.com at the moment:

Eircom posted a pre-tax loss of €16 million in the three months to the end of June yesterday and said it was determined to enter the mobile phone market, writes Jamie Smyth, Technology Reporter

(Of course, with a Jamie Smyth bye-line, it's bound to be a load of cobblers).