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Eircom 'technically in default'

  • 21-03-2012 02:08AM
    #1
    Capt'n Midnight
    Moderators, Recreation & Hobbies Moderators, Science, Health & Environment Moderators, Technology & Internet Moderators Posts: 99,654 Mod ✭✭✭✭


    http://www.irishtimes.com/newspaper/breaking/2012/0320/breaking42.html
    Credit default swaps are a form of insurance that bondholders can take out to guard against non-payment of their debts.

    Hang on , you mean all our bondholders could have taken out insurance ??


«1

Comments

  • #2
    ColeTrain
    Closed Accounts Posts: 4,681 ✭✭✭ColeTrain


    Will someone please think of Jim :(


  • #3
    Amirani
    Moderators, Society & Culture Moderators Posts: 12,622 Mod ✭✭✭✭Amirani


    Capt'n Midnight wrote: »
    http://www.irishtimes.com/newspaper/breaking/2012/0320/breaking42.html
    Credit default swaps are a form of insurance that bondholders can take out to guard against non-payment of their debts.

    Hang on , you mean all our bondholders could have taken out insurance ??

    There was. Problem with these CDS is how interconnected financial institutions become. AIG insured bad loans and without Govt. assistance, the whole of Wall Street and more would've collapsed.


  • #4
    humbert
    Registered Users, Registered Users 2 Posts: 5,238 ✭✭✭humbert


    Capt'n Midnight wrote: »
    http://www.irishtimes.com/newspaper/breaking/2012/0320/breaking42.html

    Hang on , you mean all our bondholders could have taken out insurance ??

    That's why the folks at the top of the food-chain are so sympathetic towards said bondholders and so eager that the folks at the bottom pay-up.


  • #5
    Celly Smunt
    Banned (with Prison Access) Posts: 9,463 ✭✭✭Celly Smunt


    looks like that ungrateful little bitch will have to go to Albuquerque too see Brett


  • #6
    JONJO THE MISER
    Banned (with Prison Access) Posts: 12,333 ✭✭✭✭JONJO THE MISER


    ColeTrain wrote: »
    Will someone please think of Jim :(

    Im sure Jim is being headhunted as we speak.
    Liberty insurance maybe, he would fit right in there.


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  • #7
    humbert
    Registered Users, Registered Users 2 Posts: 5,238 ✭✭✭humbert


    On the plus side, every step Eircom takes toward its demise is a step forward for Ireland's communication infrastructure. Also, it's nice to see bad things happen to utter cunts.


  • #8
    ColeTrain
    Closed Accounts Posts: 4,681 ✭✭✭ColeTrain


    JONJO THE MISER wrote: »
    Im sure Jim is being headhunted as we speak.
    Liberty insurance maybe, he would fit right in there.

    I could imagine him over at 123.ie
    He seems the loyal type. Will probably stay with the sinking ship that is Eircom.


  • #9
    DB10
    Site Banned Posts: 2,719 ✭✭✭DB10


    waaaaaaat is the story here. eircom are ****ed? prcies down? good news.


  • #10
    Pdfile
    Registered Users, Registered Users 2 Posts: 2,114 ✭✭✭Pdfile


    ColeTrain wrote: »
    I could imagine him over at 123.ie
    He seems the loyal type. Will probably stay with the sinking ship that is Eircom.


    nah, knowing his sort he'll go with harvey norman...


    their ***** and him are cut from the same cloth


  • #11
    My name is URL
    Registered Users, Registered Users 2 Posts: 25,626 ✭✭✭✭My name is URL


    http://www.rte.ie/news/2012/0329/eircom-applies-for-examinership.html
    Eircom will ask for the protection of the High Court later this afternoon.

    Mr Justice Peter Kelly was told the company and two related companies - Meteor and ITI - wanted to bring an urgent application before the court to petition for examinership.

    Examinership is a process that protects company assets from creditors for up to 100 days while a survival plan is worked on to keep the business afloat.

    The judge said he would read the papers over lunch and asked lawyers for Eircom to come back at 2pm.

    The examinership is the largest in Irish corporate history.

    Could this be the end of Eircom if it doesn't emerge successfully from this? 40% of the company's debt could be wiped out if it is successful. I wish I could go into examinership :pac:


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  • #12
    chin_grin
    Closed Accounts Posts: 10,808 ✭✭✭✭chin_grin


    https://www.boards.ie/vbulletin/showthread.php?p=77695696


  • #13
    prinz
    Registered Users, Registered Users 2 Posts: 14,598 ✭✭✭✭prinz


    Trust Peter Kelly. Seems to be a good ol' skin.


  • #14
    Nothingbetter2d
    Closed Accounts Posts: 4,037 ✭✭✭Nothingbetter2d


    fix eircom

    step 1. fire all the board of directors and dont payout bonus's or pensions

    step 2. reduce the ridiculous high charges they have on line rental and broadband (this might entice more customers)

    step 3. upgrade the network asap abandon copper based dsl in favour of fibre.


  • #15
    benway
    Registered Users, Registered Users 2 Posts: 1,061 ✭✭✭benway


    Nothingbetter2d wrote: »
    fix eircom

    step 1. fire all the board of directors and dont payout bonus's or pensions

    step 2. reduce the ridiculous high charges they have on line rental and broadband (this might entice more customers)

    step 3. upgrade the network asap abandon copper based dsl in favour of fibre.

    Step 4. ???
    Step 5. Profit

    Nice to see that privatisation sorted out all of Eircom's problems. What a debacle.


  • #16
    Paparazzo
    Closed Accounts Posts: 7,395 ✭✭✭Paparazzo


    Capt'n Midnight wrote: »
    Hang on , you mean all our bondholders could have taken out insurance ??
    If they did we'd probably be paying off the insurance companies instead


  • #17
    D-Generate
    Registered Users, Registered Users 2 Posts: 2,947 ✭✭✭D-Generate


    They have a nice big corpo box in the Aviva. I will take that off their hands no problem.


  • #18
    seamus
    Registered Users, Registered Users 2 Posts: 68,173 ✭✭✭✭seamus


    Nothingbetter2d wrote: »
    step 3. upgrade the network asap abandon copper based dsl in favour of fibre.
    The network is their problem. They're inextricably tied to a creaking and aging network and increased competition in the marketplace means that their customer base is crumbling while the network remains the same size.

    The cost of the network is increasing while their income is dropping.

    It turns out that not only was privatising the network a bad thing for the Irish state, it was also a bad thing for eircom in the end. If they'd been split 12 years ago, this problem wouldn't exist.

    What they need to focus on now is gaining access to new customers via other people's networks without the associated network costs and opening their own network to their competitors.

    It could even be the case that they could (for example) sell local infrastructure to another company who can invest in it and rent access back to eircom.
    Outside of the main cities there are local town and city companies who would chomp at the bit to take possession of eircom's local infrastructure in order to improve their own.


  • #19
    44leto
    Closed Accounts Posts: 4,137 ✭✭✭44leto


    Phew I am glad I got rid of those shares at the loss I settled for then. Mary O Rourke !!!!!!!!!!!!!!!!....

    Eircom should be a lesson to us on the dangers of privatising a national strategic utility company. But we can expect another round of privatisations soon.


  • #20
    Capt'n Midnight
    Moderators, Recreation & Hobbies Moderators, Science, Health & Environment Moderators, Technology & Internet Moderators Posts: 99,654 Mod ✭✭✭✭Capt'n Midnight


    seamus wrote: »
    It could even be the case that they could (for example) sell local infrastructure to another company who can invest in it and rent access back to eircom.
    Outside of the main cities there are local town and city companies who would chomp at the bit to take possession of eircom's local infrastructure in order to improve their own.
    No No No

    Infrastructure (copper and exchanges) should be held by the state or neutral party , sorta like ESB networks, or the railway in the UK

    all interested parties could put gear in the exchanges, last mile would be open to everyone



    Before privatisation a lot of money was invested in eircom , we had direct dialing long before the UK, if it hadn't been for the popularity of ADSL they wouldn't have to invest in hardware for ages, and in actual fact they came damn close with infrastructure investment being roughly half the amount they were writing off in depreciation.

    Eircoms problems stem from their monopoly on the last mile , UPC were held up for years on digital TV rollouts (most o the money goes to the rights holders) when they had the killer app of real broadband at at time when ADSL was the same price as downloading the same amount on per minute ISDN

    Because of this monopoly they were able to charge double the EU average for line rental, the wholesale rate for BB was so close to the retail price and the change over fee was so high that it took 18 months before that cost was covered when another provider took an eircom customer

    We are talking about a company that lost subscribers during a housing boom. Mobile phones were cheaper, a lot of people just didn't bother with a land line unless they needed broadband. Mobile data means that a lot of casual users don't need a physical line either. They priced themselves out of the market.

    The company was asset stripped many times, and whatever possible was outsourced so the only asset it has is a monopoly on copper and the physical location of exchanges (and lots of them were downsized)

    Does anyone know what % of eircom lines are in use for phones , excluding pensioners where state pays for the line rental, instead of being required for broadband or alarm lines ? ie. What percentage of the remaining customers are there by choice instead of absolute necessity or a freebie.


    /RANT


  • #21
    benway
    Registered Users, Registered Users 2 Posts: 1,061 ✭✭✭benway


    Capt'n Midnight wrote: »
    The company was asset stripped many times, and whatever possible was outsourced so the only asset it has is a monopoly on copper and the physical location of exchanges (and lots of them were downsized)

    Nice rant, chief. Doff o'cap.

    Another triumph for privatisation - can't see the 30 days grace being enough to keep the vultures from the door, somehow, can probably expect a fire sale and/or a robber baron type takeover in the not too distant.


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  • #22
    CrazyRabbit
    Registered Users, Registered Users 2 Posts: 8,659 ✭✭✭CrazyRabbit


    Eircom are a shower of rip-off bastards.

    But, when they are gone, there will be no Irish owned phone/broadband providers left in the country (I think), and that is a shame.


  • #23
    kirving
    Registered Users, Registered Users 2 Posts: 6,372 ✭✭✭kirving


    CrazyRabbit wrote: »
    Eircom are a shower of rip-off bastards.

    But, when they are gone, there will be no Irish owned phone/broadband providers left in the country (I think), and that is a shame.


    Isn't the price which they charge the customer(€€€) for line rental set by the regulator? (along with the price(~50c) they charge another operator to rent the same line)


  • #24
    vard
    Registered Users, Registered Users 2 Posts: 537 ✭✭✭vard


    I'm curious, what does this mean for Meteor? As they're owned by Eircom...


  • #25
    benway
    Registered Users, Registered Users 2 Posts: 1,061 ✭✭✭benway


    vard wrote: »
    I'm curious, what does this mean for Meteor? As they're owned by Eircom...

    In examinership as well, afaik. Wouldn't be surprised to see it being sold off.


  • #26
    vard
    Registered Users, Registered Users 2 Posts: 537 ✭✭✭vard


    This stuff trickles down and could affect many other sectors. Meteor and Eircom support many other industries. One of which being the publishing and advertising industry... some of the biggest contracts, year on year, are coming from Eircom and Meteor. Then many B2B and direct marketing companies solely rely on marketing Eircom products also.

    I dislike Eircoms service as much as the next guy, but it does rile me up when I see people saying "good riddance" etc. This isn't good news for anybody - Most definitely not for those who'll lose their jobs.


  • #27
    oppenheimer1
    Closed Accounts Posts: 5,733 ✭✭✭oppenheimer1


    Capt'n Midnight wrote: »
    No No No

    Infrastructure (copper and exchanges) should be held by the state or neutral party , sorta like ESB networks, or the railway in the UK

    all interested parties could put gear in the exchanges, last mile would be open to everyone



    Before privatisation a lot of money was invested in eircom , we had direct dialing long before the UK, if it hadn't been for the popularity of ADSL they wouldn't have to invest in hardware for ages, and in actual fact they came damn close with infrastructure investment being roughly half the amount they were writing off in depreciation.

    Eircoms problems stem from their monopoly on the last mile , UPC were held up for years on digital TV rollouts (most o the money goes to the rights holders) when they had the killer app of real broadband at at time when ADSL was the same price as downloading the same amount on per minute ISDN

    Because of this monopoly they were able to charge double the EU average for line rental, the wholesale rate for BB was so close to the retail price and the change over fee was so high that it took 18 months before that cost was covered when another provider took an eircom customer

    We are talking about a company that lost subscribers during a housing boom. Mobile phones were cheaper, a lot of people just didn't bother with a land line unless they needed broadband. Mobile data means that a lot of casual users don't need a physical line either. They priced themselves out of the market.

    The company was asset stripped many times, and whatever possible was outsourced so the only asset it has is a monopoly on copper and the physical location of exchanges (and lots of them were downsized)

    Does anyone know what % of eircom lines are in use for phones , excluding pensioners where state pays for the line rental, instead of being required for broadband or alarm lines ? ie. What percentage of the remaining customers are there by choice instead of absolute necessity or a freebie.


    /RANT

    I disagree.

    When Eircom was sold it was in the black, had an overfunded pension,had little debt and was generally a well run semi-state. It was also sold at the time of a communications and tech bubble and hence was grossly overvalued. When the bubble burst, not long after the sale the share price dropped 40%. The company was starting to fail and the only people that saw any benefit were the directors, who rewarded themselves handsomely. Ray McSharry and Dick Spring were among them.

    At this stage Eircom was ripe for sale. Enter the George Soros backed Valentia telecoms vehicle. The consortium bought eircom by financing the sale mostly by borrowing against Eircom, they only put up €900m of their own money. In other words Eircom essentially mortgaged itself to pay off its shareholders. ESOT, the eircom employees positively facilitated this. Valentia began to asset strip and seeing they had a monopoly, jacked up line rental. They made 100% return on their investment within a year. Investment in new infrastructure stalled. Most importantly they didn't care about Eircom or Ireland and had no desire to actually run a telecoms company. They later sold on, wash rinse repeat, the same happened again with a new buyer, loading more debt onto the company. Another sale to Singapore telecoms the weight of debt has become to large of a burden and default is the only way out.

    So Eircoms problems boil down to it being stripped by vultures aided and abetted by the employees share trust. No one was looking at the bigger picture, which was a shame, because when it was sold we had a damn fine telecoms network. Dare I say it we would still have the best telecom network if it had remained in state hands or even it was run by people who wanted to run a telecoms company. Ireland has been the greatest loser in this, thats the greatest tragedy.


  • #28
    gk5000
    Registered Users, Registered Users 2 Posts: 977 ✭✭✭gk5000


    oppenheimer1 wrote: »
    I disagree.

    When Eircom was sold it was in the black, had an overfunded pension,had little debt and was generally a well run semi-state. It was also sold at the time of a communications and tech bubble and hence was grossly overvalued. When the bubble burst, not long after the sale the share price dropped 40%. The company was starting to fail and the only people that saw any benefit were the directors, who rewarded themselves handsomely. Ray McSharry and Dick Spring were among them.

    At this stage Eircom was ripe for sale. Enter the George Soros backed Valentia telecoms vehicle. The consortium bought eircom by financing the sale mostly by borrowing against Eircom, they only put up €900m of their own money. In other words Eircom essentially mortgaged itself to pay off its shareholders. ESOT, the eircom employees positively facilitated this. Valentia began to asset strip and seeing they had a monopoly, jacked up line rental. They made 100% return on their investment within a year. Investment in new infrastructure stalled. Most importantly they didn't care about Eircom or Ireland and had no desire to actually run a telecoms company. They later sold on, wash rinse repeat, the same happened again with a new buyer, loading more debt onto the company. Another sale to Singapore telecoms the weight of debt has become to large of a burden and default is the only way out.

    So Eircoms problems boil down to it being stripped by vultures aided and abetted by the employees share trust. No one was looking at the bigger picture, which was a shame, because when it was sold we had a damn fine telecoms network. Dare I say it we would still have the best telecom network if it had remained in state hands or even it was run by people who wanted to run a telecoms company. Ireland has been the greatest loser in this, thats the greatest tragedy.

    Maybe it was the other way about - rip off employess facilitated by vulture capitalists.

    And maybe we (the state) were well rid of it. With mobile, copper and fibre may be obselete. Nobody needs a landline for voice any more. And while mobile broadband is not perfect, it's catching up.

    My only hope is that the lazy employees (top, middle & bottom) get what they deserve...and the bondholders... and nobody gets bailed out.


  • #29
    seamus
    Registered Users, Registered Users 2 Posts: 68,173 ✭✭✭✭seamus


    Capt'n Midnight wrote: »
    No No No

    Infrastructure (copper and exchanges) should be held by the state or neutral party , sorta like ESB networks, or the railway in the UK

    all interested parties could put gear in the exchanges, last mile would be open to everyone
    Actually I don't disagree, but I don't believe that the state has the money to either purchase or maintain eircom's infrastructure at this stage.

    I'm also uncertain as to the ultimate greatness of their infrastructure at this stage anyway. Unlike electricity for example, the last mile is on the verge of being made redundant for your normal user. Within 15 years the mobile infrastructure will be able to carry 100Mb+ traffic without any wires in the ground. Wires will always trump wireless ultimately, but for your average Joe's requirements they won't need copper or fibre to their door anymore.

    The reason their network is **** is entirely because the state didn't hold onto it, I agree completely. Eircom sat on their infrastructure and refused to invest in proper internet technologies because they wanted to suck their customers dry on per-minute dial-up rates and ISDN. They continually claimed that there was no demand for broadband and that there was no "killer app" for the internet :rolleyes:

    It was really around 2005 when UPC/NTL saw their subscriber figures shoot up and new homes weren't bothering with landlines, choosing mobiles instead, that eircom realised they couldn't sit on their network and needed to pump money into digital services. But at that stage it was already too late. The owners had more interest in sweating the assets and all their major competitors had a five-year jump on them.

    At this stage if the state was to take the network it would be a big money pit, and while the end consumer would benefit massively, how many hundreds of millions would it cost to bring it up to EU-average standard?


  • #30
    Capt'n Midnight
    Moderators, Recreation & Hobbies Moderators, Science, Health & Environment Moderators, Technology & Internet Moderators Posts: 99,654 Mod ✭✭✭✭Capt'n Midnight


    seamus wrote: »
    At this stage if the state was to take the network it would be a big money pit, and while the end consumer would benefit massively, how many hundreds of millions would it cost to bring it up to EU-average standard?
    The cost of replacing the network with fibre to the cabinet would have been a fraction of what the NRA have spent on roads, we could have a lot more telecommuters and a lot less traffic.

    With a little foresight we could have insisted on common ducts to all new builds during the boom (very low cost) passive heating (a small fraction of the cost of what houses were selling for) , fibred up cabinet for all new estates. I guess this would have paid for itself by now on the savings in imported fuel.

    midband technologies won't have the bandwidth unless you start setting up localised microcells or more point to point links. Fine for the casual user though. But the heavy lifting has to be done by fibre , and the question is how to pay for it ?

    The model in Africa is mobile broadband / fixed wireless or fibre, copper isn't relevant anymore, it's too valuable to throw down a hole.


    Perhaps the state could asset strip eircom one more time, replace copper with wireless / fiber. It's a project that would provide employment
    start by putting cabinets in estates so one fibre replaces many parallel runs of copper

    http://www.theregister.co.uk/2011/09/22/bt_copper_cable_theft/
    Ten pairs of copper cabling weighs around 132kg per mile. Which by the miracle of multiplication can be seen to be about 10 million tonnes of copper. Which, at current LME prices of just over £5,000 a tonne, is £50bn.

    BT's current market capitalisation is just north of £20bn. So, as an operating telecoms company they're worth £30bn less than the mountain of copper they're sitting upon:

    ...
    Secondly, it's a shocking indictment of Britain's criminal classes. Really, why is anyone bothering to go and nick a few miles of the stuff when you could buy the company and take it all? Asset-strip BT and come out with more money after selling the copper than the company cost you in the first place.

    That's the problem we've got with the young people of today: no ambition. ®


    http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/telecoms/8785687/BT-denies-it-is-sitting-on-a-copper-mine-worth-50bn.html



    Perhaps get ESB networks involved , they too have an interest in copper. Already have a box in houses and legal rights to enter property. (I'm not talking about internet over powerlines as that is a disaster. all the space unused after we go digital TV can be reused for internet etc, but powerline noise could kill it )


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  • #31
    [Deleted User]
    Posts: 5,093 ✭✭✭ [Deleted User]


    vard wrote: »
    I'm curious, what does this mean for Meteor? As they're owned by Eircom...

    Speculation, but it will likely be sold off as it is a profitable company.

    e-mobile on the other hand will either be sold with Meteor in a deal or will be disbanded. I think it will be disbanded, no need for it.


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