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[Irish Independent] Why Eircom urgently needs new owners.

  • 31-08-2009 12:51pm
    #1
    trekkypj
    Registered Users, Registered Users 2 Posts: 346 ✭✭


    http://www.independent.ie/business/irish/why-eircom-urgently-needs-new-owners-1873218.html
    Why Eircom urgently needs new owners
    Sunday August 30 2009

    EIRCOM'S results for the year to June demonstrate why the telco desperately needs new owners. With its debts still at stratospheric levels and fixed-line traffic falling sharply, Eircom urgently needs major financial surgery.

    With mobile having already put it under pressure, the recession has had a devastating impact on fixed-line telephony. The number of fixed lines at Eircom has fallen by almost eight per cent over the past year while retail voice traffic has dropped by a massive 13 per cent over the same period.

    Meanwhile Eircom is merely nibbling at its debt mountain. While the results announcement declared that Eircom's debts had fallen by €413m over the past two years, the reduction over the past year was a mere €120m to €3.87bn when the group's €559m PIK (payment in kind) note is taken into account.

    Even these minuscule reductions are being achieved by cutting capital expenditure to the bare minimum. Eircom's total capital expenditure last year was a mere €315m, down four per cent on the previous trading year.

    And Eircom is planning further cuts in the near future, targeting a €130m reduction in its annual capital spending budget by the year to the end of June 2011.

    This isn't just cutting the meat off the bone, but more a case of cutting the bone off the bone.

    Concise and to the point. How on earth can you maintain a telephone network let alone upgrade it on €185m a year? Surely impossible?
    Tagged:


Comments

  • #2
    watty
    Registered Users, Registered Users 2 Posts: 32,417 ✭✭✭✭watty


    The last two owners did not invest. Instead they loaded eircom with debt to fund their purchase and then sucked out money from revenue. Leaving eircom little to spend on upgrades. It's a miracle and a tribute to eircom managers at the coal face that they have achieved what they have done over the last 5 or 6 years.


  • #3
    bealtine
    Registered Users, Registered Users 2 Posts: 4,051 ✭✭✭bealtine


    trekkypj wrote: »
    http://www.independent.ie/business/irish/why-eircom-urgently-needs-new-owners-1873218.html



    Concise and to the point. How on earth can you maintain a telephone network let alone upgrade it on €185m a year? Surely impossible?

    I'm not sure what sort of magic wand the new owners will have...

    They have to renegotiate that debt mountain somehow.


  • #4
    Owen
    Registered Users, Registered Users 2 Posts: 12,683 ✭✭✭✭Owen


    I'm staggered that the other ISP's aren't advertising that they, unlike Eircom, won't censor what sites you can and can't view online. Perhaps some new owners will give Eircom a chance to switch policy on this.


  • #5
    trekkypj
    Registered Users, Registered Users 2 Posts: 346 ✭✭trekkypj


    PaintDoctor wrote: »
    I'm staggered that the other ISP's aren't advertising that they, unlike Eircom, won't censor what sites you can and can't view online. Perhaps some new owners will give Eircom a chance to switch policy on this.

    They're probably waiting to see what happens - might be that the practice will be challenged in the courts?

    Also - no ISP will advertise that they allow access to Pirate Bay - it could backfire and get them into strife. Though if they had a better, more realistic approach they could use that as an advertising line.


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