Eircom could be hit if govt cuts free telephone services, paper says

4 Dec 2012

Plans by the Irish government to cut free telephone services for older people under a budget revamp could seriously impact on troubled fixed line operator Eircom, The Irish Times reports. The Dublin administration is looking to trim the budget by introducing cuts in household benefits provided to pensioners – including elements such as electricity, gas and telephone allowances, and free TV licences. However, it has been suggested that such a move would have ramifications on Eircom’s financial situation given the former monopoly currently benefits from about 60% of the EUR100 million (USD130.1 million) paid out by the government to telecoms operators under the provisions. In response to the proposal a spokesman for the operator said: ‘A significant cut to the telephone allowance would leave Eircom with no alternative but to review the priorities in our business plan.’ The struggling firm is already looking to shed upwards of 2,000 of its workforce over the next 18 months in a bid to make annual savings of EUR100 million.

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