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Focus on Eircom move

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  • 27-11-2008 2:07pm
    #1
    bealtine
    Registered Users Posts: 4,051 ✭✭✭


    Focus on Eircom move to broadband despite uncertainty of B&B review plan

    http://www.independent.ie/business/irish/focus-on-eircom-move-to-broadband--despite-uncertainty-of-bb-review-plan-1554654.html


    By John Mulligan

    Thursday November 27 2008

    Eircom chief executive Rex Comb acknowledged yesterday that plans by the company's majority owner, Australian investment firm Babcock & Brown Capital (BCM), to review its 65pc stake in the business has created some uncertainty for staff.

    However, he maintained that management remains focused on plans to transform Eircom from a legacy fixed-line operator to a broadband business.

    Mr Comb made his comments as Eircom saw its pre-tax profit slump to just €11m in the quarter to the end of September from €32m in the same period a year ago as it faced higher operating costs and group revenue remained virtually static.

    The figure for the September quarter last year excludes an exceptional gain of €78m from its mast business, which was sold for €155m to a consortium that included Goodbody Stockbrokers.

    Eircom said that revenue for the quarter to the end of last September was €513m, down €1m year-on-year.

    Overall earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter slipped 2pc to €169m, with earnings from its fixed-line business falling about 3.5pc to €140m for the period. Earnings from its Meteor mobile arm were up slightly year-on-year to €29m from €28m.

    Eircom has seen revenues from many of its fixed-line services fall markedly. Data traffic revenue tumbled nearly 40pc to €8m from €13m, while total voice traffic revenue fell 3pc year-on-year to €110m.

    Mr Comb said that the deteriorating economic environment had an impact on the performance of the group during the quarter, and put pressure on its revenues.

    While Eircom's fixed-line voice and data business continues to suffer, take-up of its broadband internet products fared better. It added a further 21,000 DSL customers in the past quarter, bringing its broad-band subscriber base to 614,000.

    Meteor, which earlier this year breached the one million subscriber mark for the first time, generated revenue of €118m for the quarter after intra-company eliminations, up 13pc year-on-year.

    Revenue from pre-paid customers rose 4pc to €82m, while revenue from post-pay subscribers rose 21pc to €34m. Average monthly revenue per user fell by 2pc, to €39.05.

    Bundled

    The group said that decline was due to an increased take-up of bundled packages by pre-paid subscribers being offset by a higher proportion of post-pay customers.

    BCM is in the process of buying back its own management contract from its embattled Babcock & Brown parent. The move will give BCM more flexibility in dealing with its investments, which include Israel's Golden Pages as well as Eircom. BCM has indicated that it is reviewing its ownership of Eircom.


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