A Case Study on Eircom

scojones

Hey folks,
I've been given the honour of writing a case study on Eircom, tracing it's origins right up to where the company is now. Firstly, I'm not asking anyone to do my homework for me. What I am asking for, is if any of you have any concerns about how they have conducted their business in the past, let me know and I'll voice those opinions in this paper. I will of course, publish this paper to the IrelandOffline mailing list when it's completed, which should be either today or tomorrow. The angles I am going for are:
How Eircom have successfully kept their monopoly
How they have kept the local loop from being unbundled
Not rolling out DSL when it was needed - making a ****load from dialup and brainwashing everyone into thinking that ISDN is high speed internet.
How they use their monopolistic position to make it hard for their competitors to compete
Convincing everyone that there was no market for DSL in this country

I will also mention their sale of Eircell? to Vodafone and their aquisition of Meteor many years later - which was a very good move IMHO.

Is there anything else you guys feel is worth mentioning?

Cheers in advance,

sj.

paulm17781

One thing that perhaps you know but I have never seen written:

Around the time DSL started to be rolled out in UK. Eircon started actively pushing ISDN. I have no proof but I remember. I know you kind of said that but just to mention it.

DonegalMan

sjones wrote:

What I am asking for, is if any of you have any concerns about how they have conducted their business in the past, let me know and I'll voice those opinions in this paper

I think the most important issue in the development of Eircom was that when the Government decided to sell it off, nobody really realised at that time how much of an impact it would have on future development.

The Government were thinking only in terms of existing communications methodolgies, their main concern was that Eircom wouldn't use their monopoly to screw the customer on charges which they thought they could control by setting up the ODTR, predecessor of Comreg. (And, IMO, that's the fundamental problem with Comreg, they were established to deal with an entirely different set of issuse from what they are dealing with today.)

Nobody really anticipated the impact of the Internet in general and Broadband in particular, and that's the core problem - ongoing development of the national network is vital to our future technical and economic development, but the network is in the control of a private company who seem to have neither the wherewithall nor the appetite to make the level of investment required - they are driven purely by the need to meet the short term financial demands of their investors.

jwt

I will of course, publish this paper to the IrelandOffline mailing list when it's completed

kinda curious to see this, can you mail it to the ioffl email?


John

watty

DonegalMan wrote:

..., nobody really realised at that time how much of an impact it w...
....

Nobody really anticipated the impact of the Internet in general and Broadband in particular,...

You mean nobody that was making decisions wanted to know.

Any of us working in IT or telecoms industry knew.

RE: ISDN.

About the time that Eircom started marketing ISDN ("hispeed") as a solution for Internet (They NEVER marketed it as an Integrated Fax/voicemail/data 12 number phone/ direct dial in SoHo pabx for under 200Euro solution), several things happened.

* Over 75% of my customers on Eircom or other Dialup experienced a big drop in quality.

* many, many "hangups" as soon as modem connected. The multiple automatic retries each are charged as 3 minute call, even though it is an Eircom server cancelling connection as negotiated line quality is too poor (I've captured modem logs, now gone since last server rebuild). This still is the case. Eircom claim the Internet ISP and the Phone Charges are two separate companies.

* Cold calls to nearly all the eircom dialup users offering upgrade to Eircom Hispeed.

I had an extensive correspondance with Eircom and Comreg / ODTR etc and got nowhere on my own case. Eventually I got Chorus wireless phone and it was fine till they lost licence.

i71jskz5xu42pb

sjones wrote:

Is there anything else you guys feel is worth mentioning?

Outside of the whole telecoms angle there's an interesting story there in terms of the financial side:

1. Initial flotation, government rationale and public euphoria around it - how people made loads/lost loads
2. O'Reilly/O'Brien battle for take over and ESOP importance
3. The property play angle - what was the company really worth
4. The payback received by Valentia to date on dividends and its impact on capital spend
5. O'Brien recent 3% acquisition - what's it all about.

Altreab

PaschalNee wrote:

Outside of the whole telecoms angle there's an interesting story there in terms of the financial side:

1. Initial flotation, government rationale and public euphoria around it - how people made loads/lost loads
2. O'Reilly/O'Brien battle for take over and ESOP importance
3. The property play angle - what was the company really worth
4. The payback received by Valentia to date on dividends and its impact on capital spend
5. O'Brien recent 3% acquisition - what's it all about.

The involvment of the trade unions saying the company was "fully valued" at £1.19 when they themselves were trying to buy 14.9% for the ESOP after getting 14.9% for "productivity" changes. Thanks to Denis O Brien the share price was pushed a lot closer to £1.33

The last minute change of the taxation laws to make the ESOP dividends tax free, thus swinging the pendulum in favour of the oReilly/Valentia/Union bid.

Funny thing is we never heard the unions complain about "rip-off ireland" with regards to the telecommunications industry.

Then the further borrowing to pay off all the Shareholders thus increasing the amount of debt the company leading to a lack of funds to upgrade the network

O'Brien just wants to keep O'Reilly on his toes .....they dont like each other

elvis2002

I think Eircom's complete refusal to role out fibre is a good point. At the BB World forum in madrid last year some eircom guy high up came on and talked about how they are going to stick with copper. There was a sense of shock in the crowd who represented other telco's around the world that another country could be so bad.

jesus_thats_gre

When they were testing their xDSL service around 2000, were they not looking for a license to broadcast TV and this request was rejected. Eircom responded by dragging its heals in rolling out DSL..

bealtine

elvis2002 wrote:

I think Eircom's complete refusal to role out fibre is a good point. At the BB World forum in madrid last year some eircom guy high up came on and talked about how they are going to stick with copper. There was a sense of shock in the crowd who represented other telco's around the world that another country could be so bad.

That is one of the most bizarre statements I have ever heard made (allegedly)...
We (eircom) want to stay in the 19th century and won't roll out that new fangled fibre stuff to our customers.

Why should we roll out fibre, there is no demand for it.
to paraphrase : You can't have it so obviously there is no demand.
(Sound familiar?)

Sponge Bob

they are slowly starting to use the fibre they installed in the late 1990s with government grant aid in rural Galway , Cork and Donegal so there must be demand .....even in rural areas.

bealtine

Sponge Bob wrote:

they are slowly starting to use the fibre they installed in the late 1990s with government grant aid in rural Galway , Cork and Donegal so there must be demand .....even in rural areas.

That is hardly FTTC or FTTH, is it?

Sponge Bob

FTTB my son

pork99

elvis2002 wrote:

I think Eircom's complete refusal to role out fibre is a good point. At the BB World forum in madrid last year some eircom guy high up came on and talked about how they are going to stick with copper. There was a sense of shock in the crowd who represented other telco's around the world that another country could be so bad.

Having started shaving back in the 80s I'm used to the idea of Ireland being a backward third rate place, packed with savagely ignorant priest ridden muppets. In fact sometimes I almost miss those days. It's ye young whippersnappers who've got used to the easy life in the last 10 years who find this sort of thing shocking.

(my UTVIP connection has gone up to 2mbps - fibre or copper, that'll keep me happy for the time being)