eircom: revenues, profits rise in year to March

31 May 2007

Irish incumbent eircom has announced its fourth quarter and year to date results for the financial period ending 31 March 2007. The operator reported operating profit of EUR240 million (USD322 million) for the full year, up from EUR234 million in fiscal 2005-06, as total revenues rose 16% to EUR1.96 billion. The telco’s fixed line business was the single largest contributor to the total, driven by strong growth from broadband. 57,000 DSL broadband customers signed up in the fourth quarter to 31 March, bringing the total number of subscribers to 417,000, an 81% increase on the previous year. As of 10 May 2007, there are 440,000 broadband customers on eircom’s network. The former monopoly is committed to developing its broadband access capabilities and NGN core network in 2007, which it hopes will provide the backbone of advanced services for years to come. Fixed line revenue was up 2% to EUR1.65 billion, but eircom reported that underlying profits dipped to EUR594 million, due in part to repairs from winter storms carried out on its network.

The group said its mobile arm Meteor reported a 33% rise in subscribers in the year to 31 March, to 832,000. The unit added 29,000 net new subscribers in the fourth quarter and as at 16 May had boosted the total to 849,000 users. Underlying profits for Meteor were EUR54 million for the year. eircom chief executive Pierre Danon also ruled out a re-branding of Meteor to eircom.

In a separate story, eircom yesterday told its 7,025 employees that around 900 of them would be made redundant between now and 2010, while the mobile operator O2 Ireland announced plans to outsource 450 jobs – stressing that employees would be able to have a job with the company that wins the outsourcing tender. eircom is striving to improve its efficiency and is looking to cut the workforce by about 10% over the next three years. It has not given any details of redundancy packages that will be available. Meanwhile, O2 declined to comment on whether it would seek compulsory redundancies if insufficient numbers applied for voluntary redundancy.

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