eircom dead now that upc announce new speeds and cheaper prices

D'Peoples Voice

Fears over Eircom's €1bn debt pile spark bond slide
http://www.independent.ie/business/irish/fears-over-eircoms-euro1bn-debt-pile-spark-bond-slide-2677610.html
By Donal O'Donovan

Friday June 17 2011

EIRCOM'S bonds plunged in the secondary market yesterday over reports the company could try to renege on €1bn of debt.

The price paid in the markets for a €350m slice of floating rate notes (FRN) fell from just under 30pc of face value to the low 20s traders said.

In May the company said it has plenty of cash to meet its interest payments as they fall but admitted its debt burden is too big for its business to manage in the longer term.

- Donal O'Donovan

Irish Independent

if you have any advice for Eircom - please go to here

Solair

It's not looking very good for eircom.

Hopefully, this might finally force a crisis that gets the whole eircom debt mess cleaned up once and for all.

The national telecommunications infrastructure that eircom plc owns, needs to be in the hands of a company that's actually capable of investing in it and maintaining standards.

eircom however should absolutely not get a government bale out. We have enough to be doing without dealing with banjaxed telephone companies as well as banks.

Simple solution is :

1) Let the markets take their course.
2) Impose much more prescriptive terms on eircom's telecommunications license i.e. realistic ones that require things like DSL performance standards.
3) If the company cannot reach these, auction its license.
3a) this would effectively force the sale of the infrastructure to a company capable of actually running it properly.
4) Use the opportunity to split eircom's access network off into a separate entity entirely.

ninjasurfer1

Simple solution is :

1) Let the markets take their course.

That could be messy, as the senior bondholders will be looking to maximise any return they may have. Whether this entails investing in a telco to allow it to compete or selling it off piecemeal (to the possible detriment of the consumer) is debatable.

2) Impose much more prescriptive terms on eircom's telecommunications license i.e. realistic ones that require things like DSL performance standards.

afaik (open to correction), eircom's USO obligation is to provide a service cabable of providing telephony services. Bringing in requirements for DSL performance, etc, would apply to all operators (though some of them are eircom resellers so may get away with it), and would be a huge change in the current regulatory environment.
Depending on the DSL performance required, I'd think eircom would need to invest 10's if not 100's of millions to bring a reasonable level of DSL to ALL customers.(if a DSL USO is implemented for all customers, urban and rural).

3) If the company cannot reach these, auction its license.

I presume this criteria would have to apply to all operators, not just eircom?
Dependant on the requirements, any potential investors could be put off on the initial investment required to bring the network up to meet these minimum standards. In a shrinking market, this cost could be offputting.

3a) this would effectively force the sale of the infrastructure to a company capable of actually running it properly.

STT were seen as the white knights (with the capability to call on previous telco experience) when they took over. Dunno would i be hopeful of any other investors willing to step in to invest significant money without a definite return. (hopefully i'm wrong though!!).

4) Use the opportunity to split eircom's access network off into a separate entity entirely.

Dependant on any future restructuring talks, this could happen if the bondholders get hold of it and look to sell it off piecemeal to maximise return.

lucernarian

ninjasurfer1 wrote: »

afaik (open to correction), eircom's USO obligation is to provide a service cabable of providing telephony services. Bringing in requirements for DSL performance, etc, would apply to all operators (though some of them are eircom resellers so may get away with it), and would be a huge change in the current regulatory environment.
Depending on the DSL performance required, I'd think eircom would need to invest 10's if not 100's of millions to bring a reasonable level of DSL to ALL customers.(if a DSL USO is implemented for all customers, urban and rural).

They also have a requirement to provide 28.8kbps dialup modem access though the enforcement of this consist of "targets" which eircom already exceed. Though if a customer complains, I think they do have to act so long as any remedial works cost less than €7k per customer.

I don't know where you get this idea that universal DSL availability would necessarily involve other operators? Eircom are the PSO holder and designated as having significant market power. They would indeed need to invest tens of millions and more likely well over €100 million. Having said that, BT's provision of almost universal DSL access costed the NI Govt something like only £20 million, 5 years ago. This was mandated on a minimum of 512kbps which does make the job a fair bit easier. Any state involvement here has looked for a nominal 1 mbit service.

My opinion is that eircom ought to be obliged to make that investment though it would undoubtedly be a legal nightmare. Given eircom's track record with LLU and the threatened litigation over a relatively minor aspect of their PSO. I wonder how often the PSO License comes up for renewal...

ninjasurfer1

To_be_confirmed wrote: »

They also have a requirement to provide 28.8kbps dialup modem access though the enforcement of this consist of "targets" which eircom already exceed. Though if a customer complains, I think they do have to act so long as any remedial works cost less than €7k per customer.
I don't know where you get this idea that universal DSL availability would necessarily involve other operators?
Eircom are the PSO holder and designated as having significant market power.

They're the current USO holder (until 30th June 2012).
USO currently entails:
providing access (phone lines) at a fixed location, providing printed phone directories, providing public payphones, providing services to disabled users, and introducing methods to help consumers control spending and keep costs affordable.
With mobile penetration so high, and eircoms fixed line penetration dropping so rapidly, It could be that a mobile company (tied with NBS) may end up with future USO obligations.
As USO does not currently include broadband internet connections, i would think that such a fundamental change to the voice USO would be fought tooth and nail.
Why not future proof it and impose a fibre USO on UPC as they effectively have a monopoly on it?

They would indeed need to invest tens of millions and more likely well over €100 million. Having said that, BT's provision of almost universal DSL access costed the NI Govt something like only £20 million, 5 years ago. This was mandated on a minimum of 512kbps which does make the job a fair bit easier. Any state involvement here has looked for a nominal 1 mbit service.

Assuming eircom manage to restructure their debt, I would assume that eircom (as a private company out to maximise profits), would invest if there's a proven return on the investment, and not just the Govt of the day trying to bring in their "smart economy" initiatives on the cheap.

My opinion is that eircom ought to be obliged to make that investment though it would undoubtedly be a legal nightmare. Given eircom's track record with LLU and the threatened litigation over a relatively minor aspect of their PSO. I wonder how often the PSO License comes up for renewal...

You're right.While it would undoubtedly be good for the consumer, I'd expect the state changing the goalposts and imposing an obligation like this on a privately held company (without a proven return for the company) would end in it being tied up in court for years.

lucernarian

I'm not sure what that post was trying to point out or address at times. The other USO aspects of eircom's license weren't relevant to this discussion.

Of course eircom as a private company will look for a good return on investment. What's at issue here is the best way to do that;)

I assume the comment on UPC as a USO operator was a flippant remark as that would take a finding of significant market power against it for one, and in any case UPC's current network will only reach less than 60% of houses for broadband/phone provision whereas eircom already serve well over 80% of all houses with fixed broadband availability and nationwide too. I'm not sure "such a fundamental change" was the best choice of words. If you refer to the mentality of eircom management who were even described by their ex-colleages in the DCENR as luddites then it would most certainly be a fundamental change to the business model.

My wonderings in my last post centre on the possibility of simply adding new requirements to the USO when it comes up for renewal. They couldn't be changed willy-nilly as there would be inevitable damage to eircom's business prospects but now that an actual telecoms company owns Eircom, perhaps some sort of financial agreement can be reached much like the NI assembly and BT have reached on occasions since 2006. Indeed, maybe a change in the USO would be irrelevant through that.

But I don't expect that simply because the Next Generation Task Force is already talking about being "technology neutral" etc. etc. and with most of the business representatives having vested interest in wireless technologies.

bealtine

To_be_confirmed wrote: »

I'm not sure what that post was trying to point out or address at times. The other USO aspects of eircom's license weren't relevant to this discussion.



A little birdie told me that the USO is to be in court over the next few weeks. That should be interesting if true...

rommy

I for one cant wait for eircom to go belly up they all ways have been and all ways will be one of the biggest rip off companies in Ireland,line rental should have been abolished in the 80s and their lack of investment in their network over the years is a joke all this while the ceo drives home in his merc.upc are 1000000s times better

ninjasurfer1

bealtine wrote: »

A little birdie told me that the USO is to be in court over the next few weeks. That should be interesting if true...

I thought eircom had it until June 30th 2012?
How does the USO get "awarded" anyway? Do companies apply for it, or do they get stuck with it by comreg?

D'Peoples Voice

this won't help Eircom

http://www.businessworld.ie/livenews.htm?a=2802827

UPC offers Office software from a cloud

Wednesday, June 29 07:02:11

Cable firm UPC has announced that it is to offer Microsoft Office 365 on its network.

The product - a "cloud" version of the long established software suite - will be bundled with UPC's broadband and voice service.

The launch is aimed at small and medium sized business users.

Office 365 brings online versions of Microsoft Exchange, Microsoft SharePoint, and Microsoft Lync together with Office desktop software as a single cloud service.

It allows customers to work with e-mail accounts, documents, contacts and calendars from any given location, both with the use of desk top computers and laptops as well as mobile equipment as well as smartphones and tablets.

UPC will offer Office 365 will be offered in various formats from an entry bundle called Professional 365, which hosts 20Mb 4 voice lines with no line rental for 89 euro per month, to a 100Mb, 6 voice line package for 154 euros per month

liamf

this won't help Eircom

http://www.businessworld.ie/livenews.htm?a=2802827

And, while somewhat off topic, this:

http://www.zdnet.com/blog/igeneration/microsoft-we-can-hand-over-office-365-data-without-your-permission/11041

won't help Office 365.

D'Peoples Voice

it would be interesting to hear if Eircom's would figures would back up this survey

http://www.businessworld.ie/livenews.htm?a=2809308

A third of Irish homes use mobile only
Tuesday, July 12 17:29:57
By early 2011, one third of Irish households had moved to mobile phone access only, according to an EU-wide survey.
This makes Irish households one of the fastest in the EU to give up their landlines in favour of mobile phones, with an increase of 7pc since 2009, the fourth fastest in the EU.

The survey found that 55pc of Irish households have access to both fixed and mobile telephone lines, a drop of 11pc since end of 2009 and the highest drop in Europe. The EU average is 62pc, unchanged since the last survey.

D'Peoples Voice

no shock really :rolleyes:

http://www.businessworld.ie/livenews.htm?a=2822165

The latest results show that UPC has grown its broadband business by 32pc year on year. Over the same period, UPC has grown its voice business by 56pc. The company has experienced its third successive quarter of growth in Digital Cable TV subscriptions.

It had 224,800 broadband subscribers, 121,200 phone customers and 384,600 digital TV subscribers at the end of June, it said.

just to put the above figures in context

Page 18 of 20 (Dated June 30, 2011)

	Homes		2-way Homes  
	Passed		Passed (2 services or more possible)		
Ireland	872,900		687,500	

Video	
	Analog Cable 	Digital Cable	MMDS	
	Subscribers 	Subscribers	Subscribers
	95,800		325,100		59,900

Internet
	Homes
	Serviceable	Subscribers
	687,500		224,800

Telephony
	Homes
	Serviceable	Subscribers
	642,600		121,200	

D'Peoples Voice

it was inevitable.....

Last night one lender said that an auction process was unlikely to lead to any new bids.

Anyone interested in Eircom would have come forward by now, he added.

The lender said he feared that the auction was being planned in order to help prove in court that Eircom was worth less than the sum of its debts, because only a low offer or even no offer is likely to result from the fresh auction.

In an examinership, a low offer or the lack of interest would back up any plan to force losses on debt holders.

vibe666

do you ever feel like you're talking to yourself on this thread?

you're the only one who's been posting in it since June.

KIERAN1

Speed is everything especially if you play X box live or Playstation live. Download stuff and watch videos for streaming and buffering speed is everything. Not so important, if you only browse webpages.

Since gaming is one of most profitable businesses in the world. And lot of people across the world and in Ireland play games. So obviously UPC should target a certain demographic of people, like gamers for example.

Eircom, is aware their behind UPC.

AlmightyCushion

KIERAN1 wrote: »

Speed is everything especially if you play X box live or Playstation live. Download stuff and watch videos for streaming and buffering speed is everything. Not so important, if you only browse webpages.

Since gaming is one of most profitable businesses in the world. And lot of people across the world and in Ireland play games. So obviously UPC should target a certain demographic of people, like gamers for example.

Eircom, is aware their behind UPC.

Speed isn't that important for gaming. Low latency is much more important for gamers. You could have a 1Gbps connection but if the latency is too high it would make gaming online unplayable.

vibe666

AlmightyCushion wrote: »

Speed isn't that important for gaming. Low latency is much more important for gamers. You could have a 1Gbps connection but if the latency is too high it would make gaming online unplayable.

guns don't kill people, lag does. :pac:

Cabaal

AlmightyCushion wrote: »

Speed isn't that important for gaming. Low latency is much more important for gamers. You could have a 1Gbps connection but if the latency is too high it would make gaming online unplayable.

Spot on,
A 5MB line with a 5ms response will beat a 30MB line with a 500ms response time when it comes to gaming any day of the week.

Speed is nice but it sure isn't everything.

Freddie59

Cabaal wrote: »

Spot on,
A 5MB line with a 5ms response will beat a 30MB line with a 500ms response time when it comes to gaming any day of the week.

Speed is nice but it sure isn't everything.

Is that the old 'size doesn't matter' argument..............?;):D

Sponge Bob

The likelihood of a disorderly collapse of the eircom debt structure rises.

http://www.irishtimes.com/newspaper/finance/2011/1203/1224308522081.html

EIRCOM’S INDEPENDENT directors will meet on Monday to discuss the implications of yesterday’s decision by Singapore-based majority shareholder ST Telemedia (STT) not to meet the extended deadline for submitting a proposal on restructuring the company’s €3.7 billion net debt.

This decision, which surprised most observers of this long-running saga, has left the directors with two proposals to consider.

One is from senior lenders, who are owed about €2.4 billion, and the other is from second-lien bondholders, who face having their debts either substantially reduced or entirely wiped out in any restructuring.

No new money from STT or the workers ESOT then.

Eircom’s directors yesterday moved to seek an extension from its lenders to a waiver on the company’s banking covenants, which were breached in the summer.

They have sought an extension until January 31st of the current waiver, which expires on December 15th.

STT, which owns close to two-thirds of Eircom, had been expected to put forward a proposal in conjunction with the Employee Share Ownership Trust, which holds the balances of shares.

This was expected to have involved STT and the trust investing €300 million and offering 20 per cent of the equity to first-lien lenders, who would also have taken an 8 per cent haircut on their loans.

But the Singapore group has chosen not to participate in the restructuring at this point, although it indicated it might come back at a later date.

Of course they need a writeoff of at least €2-2.5bn of the debt if they are to have any real cash left to invest, they only proposed to write off half that amount which would have left them where they were around 2008 or so...ie not enough money to invest either.

The first-lien lenders are believed to have submitted a proposal that would involve them taking full ownership of the business, while writing down their debts by 7 to 9 per cent.

They would also agree to extend the maturity of the debt to September 2017 while the company would have access to its near €400 million cash reserves for investment purposes.

And say 10 hail marys lads

Azhrei

alanhiggyno1 wrote: »

could this be the final nail in the coffin for eircom broadband?

Do UPC offer a similar amount of coverage? No?

Then no.

Johnmb

Azhrei wrote: »

Do UPC offer a similar amount of coverage? No?

Then no.

I think the main point is financial. UPC don't offer the same amount of coverage, but they do cover some of the most profitable areas (i.e. the main urban areas). Eircom are struggling financially as it is, if they lose too many customers in their high profit areas, that could very easily send them under. Judging from some of the reports being referenced here, that's exactly what's happening, so it could be the final nail in the coffin for Eircom (at least as we currently know it) as a whole, not just their broadband!

Sponge Bob

Todays Business Post reckons they will go into examinership ( while the current directors control the business)

seanoge

Don't forget, move to UPC and your land line may be gone. I lost mine and had to pay for a new connection when I left UPC after 1 year contract. And had awful problems getting my old number back. Had to goto to Eircom as they were the only people who could do it.

Onikage

seanoge wrote: »

Don't forget, move to UPC and your land line may be gone. I lost mine and had to pay for a new connection when I left UPC after 1 year contract. And had awful problems getting my old number back. Had to goto to Eircom as they were the only people who could do it.

Vodafone can reconnect your line so no reason why others can't. And it's hardly "gone", you just need to pay a reconnection fee
http://www.vodafone.ie/df/homebroadband/connectionquery/

vibe666

seanoge wrote: »

Don't forget, move to UPC and your land line may be gone. I lost mine and had to pay for a new connection when I left UPC after 1 year contract. And had awful problems getting my old number back. Had to goto to Eircom as they were the only people who could do it.

i ported my eircom/BT number to UPC without any problems and i'd imagine i can move it to any other provider i like, just like you can with a mobile number.

it was actually a lot less hassle than moving it from eircom to BT in the first place as eircom fecked it up when they did it originally.

Sponge Bob

Big Yawn number #3443

http://www.irishtimes.com/newspaper/finance/2011/1213/1224308998546.html

Independent directors of Eircom have already received two proposals for restructuring its massive debt, including a suggestion from its first lien lenders, who are owed €2.4 billion, that they take full control of the business.

They would take 100 per cent of Eircom’s equity in return for writing down their debt by 7 to 9 per cent, and extending the maturity date of the debt.

Second lien lenders, who face having their debt wiped out, have also submitted a proposal.

It might work if it were 70% .....7% is ever so slightly Meh!

SINGAPORE-BASED majority shareholder in Eircom, ST Telemedia (STT), has made a balance sheet restructuring proposal to the independent directors of the debt-riddled company.

Earlier this month STT surprised many observers of Eircom’s fortunes when it said it would not be submitting a proposal “owing to the continuing macro-economic uncertainty in the euro zone”.

A spokesman for STT would not comment when asked why it had subsequently tabled a proposal.

Even more Meh!.

Sponge Bob

This in place of long overdue accounts.

http://siteassets.eircom.net/assets/static/pdf/IR/DecemberTradingupdate131211FINAL2.docx.pdf

There is more

eircom Trading Update
1. Trading Update
eircom yesterday presented estimated results for the month of October 2011 on a private
basis to lenders under the Senior Facility Agreement in accordance with the provisions of
a covenant waiver that has been agreed with those lenders. The estimated consolidated
EBITDA for the month of October 2011 and for the financial year through 31 October 2011
for ERCIH is on plan and in line with expectations. The estimated results show a significant
reduction in performance compared to the corresponding periods in 2010, as expected.
The consolidated EBITDA for ERCIPE and ERCIF is consistent with the performance of
ERCIH.
eircom remains on target to commence its Phase 1 fibre build in January 2012, which is
expected to deliver fibre connections to 100,000 premises by Summer

D'Peoples Voice

I did hear a recent Eircom radio advert saying that 60,000 customers have moved back to Eircom....

UPC makes operating profit of 6.7m euros
Monday, December 12 06:54:41
TV, broadband and telephone services company UPC Ireland last year returned to an operating profit of E6.7 million as it cornered more of the broadband market, accounts just filed show.

At the end of last year, the company had a customer base of 533,558 - down marginally from 536,044 customers in 2009.