Anyone wanna buy Irish Broadband?

Hacketry

National Toll Roads (NTR) has reportedly approached several companies in an effort to sell off its broadband subsidiary Irish Broadband.

NTR is said to be looking for EUR60 million for its broadband subsidiary. The news is unsurprising with NTR announcing earlier this year that Irish Broadband was no longer a core part of the business.

What's the story here then? Who is going to be interested in buying Irish Broadband when it seems to be haemoraging customers, soaking up thousands of euros of NTR's cash every month, is ran on some soon-to-be-obsolete hardware, and has a generally iffy customer servive reputaion?

Obviously somebody will buy the (I think) 18,000 customers, especially if they can migrate them onto a WiMax system, but sixty million quid...? That'd probably get you a good strip of road these days.

Capt'n Midnight

Hacketry wrote:

What's the story here then? Who is going to be interested in buying Irish Broadband when it seems to be haemoraging customers, soaking up thousands of euros of NTR's cash every month, is ran on some soon-to-be-obsolete hardware, and has a generally iffy customer servive reputaion?

Obviously somebody will buy the (I think) 18,000 customers, especially if they can migrate them onto a WiMax system, but sixty million quid...? That'd probably get you a good strip of road these days.

Time was sixty million quid was twice what you need to get rights to all links between the N3 and N4..

A figure of customer Churn would be interesting.

smellslikeshoes

Might be my solution to getting broadband to my house:p

limey_tank

Hacketry wrote:

National Toll Roads (NTR) has reportedly approached several companies in an effort to sell off its broadband subsidiary Irish Broadband.

NTR owns IBB? :eek: That explains everything!

NTR overpriced tolls = IBB pricing.
Queues approaching the booths = The awful ping times.
Not enough toll booths open = Contention ratios which make your connection slower than dialup.

Foxwood

The piece on the TE website also included this snippet:

The subsidiary recorded revenue of €8.2m in the 15 months to March of this year, compared with €2.2m for all of 2004.

They appear to have done something right in 2005 - the interesting thing would be to see the revenue figures for the first 6 months of this year to see if the growth has continued.

http://www.rte.ie/business/2006/0904/Presswatch.html

limey_tank

At first glance IBB seemed like a good product. It still is, on the face of things. No contract and one of the cheapest products out there.

However, the quality has not improved and does not represent value for money. As soon as a viable competitive product is available I'll probably switch to that.

Perhaps NTR are trying to make a quick buck by raising value in the company then selling it. All we can hope for is a buyer who is interested in investing (and improving contention ratios). All the same, 8.2M revenue is not 8.2M profit.

mayhem#

There is a big difference between what the consumer would see as a "good" company and what an investor would see as a good investment. Look at Eircon; everybody complains about them and still they get B&B to buy them.
I would not dismiss IBB as a bad investment that easliy...

E.

Sponge Bob

Hacketry wrote:

Obviously somebody will buy the (I think) 18,000 customers,

NTR reported themselves that they had 25000 customers less than 6 months ago, where did 18000 come from ??? . They confirmed the 25000 figure a week back and also said they were thinking of floating them , see here

Link

Revenues increased to €8.2 million (2004: €2.2 million)
Number three provider of broadband services in Ireland and the leading provider
of wireless broadband
• Customer numbers increased to 25,000 at the end of March 2006 from 4,000 at
the end of December 2004

And thats also where the €8.2m revenue figure came from .

useruser

Sponge Bob wrote:

NTR reported themselves that they had 25000 customers less than 6 months ago, where did 18000 come from ??? . They confirmed the 25000 figure a week back and also said they were thinking of floating them , see hereAnd thats also where the €8.2m revenue figure came from .

There was an article in the SBP or the IT the other day mentioning IBB and Digiweb that gave 18000 as the number of Digiweb subs.

They also mentioned that IBB had 15m of debt last year if I recall correctly, 60m seems a tad dot-com to me - 2400 per subscriber?

mayhem#

useruser wrote:

There was an article in the SBP or the IT the other day mentioning IBB and Digiweb that gave 18000 as the number of Digiweb subs.

They also mentioned that IBB had 15m of debt last year if I recall correctly, 60m seems a tad dot-com to me - 2400 per subscriber?

15 million debt is nothing to worry about on the short term. What do you think the CAPEX of their rollout is?
What matters is their long term forecast. Companies like this are generally not expected to make a profit for the first 5 years or so. Look at Amazon, they took 10 years or so before making any profit...

As for the 60 million; with m&a's in the isp sector payments of 2-3 years subscription payments per customers are not rare...

E.

useruser

mayhem# wrote:

15 million debt is nothing to worry about on the short term. What do you think the CAPEX of their rollout is?
What matters is their long term forecast. Companies like this are generally not expected to make a profit for the first 5 years or so. Look at Amazon, they took 10 years or so before making any profit...
As for the 60 million; with m&a's in the isp sector payments of 2-3 years subscription payments per customers are not rare...

Don't agree with any of that but wouldn't be surprised if they can find another concrete company to stump up the cash.

€18.95 * 12 * 3 is not close to €2400. Even if all of the customers are "Breeze" at €40+ per month it's still not close to 2400. It's clear that NTR want rid of them for some reason, why would they not hold onto the company for the next 5 years and sell them then? They hardly need the cash.

watty

useruser wrote:

There was an article in the SBP or the IT the other day mentioning IBB and Digiweb that gave 18000 as the number of Digiweb subs.

They also mentioned that IBB had 15m of debt last year if I recall correctly, 60m seems a tad dot-com to me - 2400 per subscriber?

I heard that each subscriber costs them close to 2k. If they can't reduce churn and hold on to each customer for 5 years they will keep losing money.

useruser

watty wrote:

I heard that each subscriber costs them close to 2k. If they can't reduce churn and hold on to each customer for 5 years they will keep losing money.

At 2k acquisition cost per Ripwave sub it would take nearly nine years to break even! I don't think the business model is that bad!

gline

lest we forget IBB offer some serious business packages aswell. maybe thats where they make their serious cash???

watty

useruser wrote:

At 2k acquisition cost per Ripwave sub it would take nearly nine years to break even! I don't think the business model is that bad!

Maybe it was 1K. Anyway a figure of five years mentioned.

Hacketry

useruser wrote:

Don't agree with any of that but wouldn't be surprised if they can find another concrete company to stump up the cash.

€18.95 * 12 * 3 is not close to €2400. Even if all of the customers are "Breeze" at €40+ per month it's still not close to 2400. It's clear that NTR want rid of them for some reason, why would they not hold onto the company for the next 5 years and sell them then? They hardly need the cash.

Maybe NTR want rid of them now is because they realise that IBB's hardware is incompatible with other broadband operators in Ireland. The "concrete company" may have realised that their foray into high-tech investment is not as future proofed as they originally imagined.

Then again, IBB could be of interest to private investors who want to buy it and sell it off quick for a fast buck. The question is, of course, who will they sell it to?
Maybe a foolish British telco looking for a way into the Irish market perhaps?

mayhem#

Hacketry wrote:

Maybe NTR want rid of them now is because they realise that IBB's hardware is incompatible with other broadband operators in Ireland.

Can you explain in what way it is not compatible with other broadband operators? Or for that matter why it should be?

E.

stepbar

€8.2 mil revenue.... Ah, but did they make a profit?? Me thinks not..... Kilsaran Concrete is also a significant shareholder, I wonder is it a concerted effort to sell?

Anyhow Im dumbfounded as to why Kilsaran invested..., exactly what strategy were they following? Where were the synergies??? :rolleyes: I think the best thing would be for Management to do an MBO or float it on the AIX.

watty

Only ADSL operators' modems are "compatible". It doens't matter. That is not the worry at all.