Eircom reports 9% dip in first-quarter revenues

25 Nov 2009

Ireland’s former monopoly fixed line operator Eircom today announced its results for the first quarter ended 30 September 2009, showing that group revenues fell 9% year-on-year to EUR468 million (USD699 million), while EBITDA slipped marginally to EUR168 million. The group’s adjusted EBITDA was supported by further cost reductions, primarily in the fixed line business, it said in its release. Eircom’s operating costs were 11% lower than last year, reflecting significantly reduced labour costs and other operating expenses. However, the telco noted that the decline in revenues ‘remains challenging, and cost reduction and improved customer retention will remain key objectives for the business’.

The incumbent reported a 9% y-o-y drop in revenues at its fixed line division to EUR364 million, with its performance undermined by lower voice traffic and higher discounts for its various offers and bundles. Net PSTN line losses amounted to 23,000 for the quarter ended 30 September 2009, compared with net losses of 24,000 in the quarter to 30 June 2009, and 11,000 in the quarter ended 30 September 2008, Eircom said. DSL customer numbers stood at

673,000 at 30 September 2009, including 482,000 retail DSL customers. Meanwhile turnover at the group’s mobile arm Meteor fell 6% y-o-y to EUR119 million, on falling average revenues per user (ARPU). Meteor said monthly blended ARPU declined 8% to EUR36.02, mainly as a result of new lower tariff plans and a change in traffic mix. On a more positive note, the dip in mobile revenues was partially offset by customer growth – especially for mobile broadband services – with the total user base reaching 1.046 million as at 30 September 2009, up a net 38,000 in a year.

Commenting on the results, Eircom chief executive office Paul Donovan said: ‘The operating environment in Ireland remains challenging from an economic, competitive and regulatory perspective. Within that context, the group has delivered a set of results which underline the commitment to continued strong cost control’.

Capital expenditure in fixed assets totalled EUR92 million in the quarter under review as eircom continued to deliver on its commitment to invest in ‘key infrastructure programmes’. Major CAPEX projects under way include: the Next Generation Core network upgrade, which is now operational at more than 60 nodes across the Republic; the ongoing 3G/HSPA network rollout, which currently offers high speed mobile coverage to 53% of the population including a 14.4Mbps service in Galway; a fixed line broadband network which now has more than one million lines connected to high speed ADSL2+ technology; and the Tetra communications network which supports the nation’s emergency services.

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