Eircom revenues fall €3m due to slump in DSL and retail subscribers

27 Feb 2009

The deteriorating economic environment, a 42pc decline in DSL numbers and the loss of 41,000 retail customers have all led to a €3m drop in revenue for the second quarter at Eircom, resulting in revenues of €517m at the end of December.

Eircom said this morning that its defined benefit pension scheme has fallen to a deficit of €433m, from a surplus of €20m at 30 June 2008 and a surplus of €422m at 30 June 2007, reflecting the sharp declines in stock markets.

The company has booked a goodwill impairment charge of €720m in the current period. Group revenue for the six months was €1.03bn, in line with the corresponding six months for the previous year. Group EBITDA was €333m, down 4pc.

In the fixed-line segment, the group added 46,000 DSL broadband customers during the first six months of the financial year, down 42pc on the prior period.

During the period, Eircom lost 41,000 retail telephone customers, compared with 8,000 in the corresponding period last year.

Meteor mobile revenues were €255m in the half year, up 7pc on the corresponding period. EBITDA at Meteor was up 6pc to €57m, despite mobile subscriber growth declining 44pc year-on-year at 49,000.

Cash capital expenditure for the first six months of the year was €197m. Eircom has invested approximately €900m in capital expenditure in the past two and a half years.

The company said it is progressing with the construction of Meteor’s 3G network. It will be launching Meteor’s commercial 3G services in the greater Dublin and Cork areas next week, and in major towns across the country during 2009.

DSL broadband services are now available on more than 1.4 million telephone lines. Over 245,000 Eircom Retail customers are now getting speeds of 3Mbps or faster.

The company said that Tetra’s radio network for Ireland’s emergency services is now ready for launch in the Dublin region, and will extend across the country in the coming months.

Eircom’s former managing director of retail, Cathal Magee, has been appointed acting CEO following the departure of Rex Comb.

“Despite the deepening economic crisis and the pressures that this will bring for our business, we are confident that Eircom has the scale, resilience and depth of capabilities to offer our customers competitive products and services over the highest quality fixed and mobile networks,” Magee said.

“The investment we have made over the past few years will serve us well. We now need to focus on reducing our cost base to underpin our competitiveness going forward in these difficult economic conditions,” Magee added.

By John Kennedy