Eircom revenues rise in Q1

4 Aug 2006

Eircom’s first-quarter revenues were up to €483m, an increase of 21pc on the same period a year ago.

For the quarter ended 30 June, the telecoms firm reported a 9pc increase in EBITDA (earnings before interest, tax, depreciation and amortisation) to €162m, with the growth mainly due to the contribution of its mobile arm Meteor. The latter’s quarterly EBITDA was €13m, which Eircom said was in line with expectations.

Eircom reported €74m in capital expenditure during the quarter, which it said was spent on increasing capacity, demand-led growth, DSL rollout and capex relating to Meteor.

As of last week (27 July), Eircom had 274,000 DSL customers, up from 260,000 recorded at 30 June. The results do not distinguish between customers paying Eircom directly and those receiving services from alternative operators who are reselling internet services from Eircom.

Meteor’s subscriber base increased to 700,000 at the end of July, up from the official quarter-end figure of 683,000 at 30 June.

In Eircom’s fixed-line business, higher access and interconnect revenues were offset by lower traffic revenue and higher operating costs; the company said this mainly involved payments to other telecommunication operators and higher miscellaneous costs.

The details of the results show that in terms of minutes and revenue, voice traffic was down in all categories when compared with the same quarter a year ago. Overall, data traffic revenue fell slightly, with the loss seen mostly in the ISDN space as more customers migrated to cheaper flat-rate internet services. The proof of this is that data revenue over the traditional phone network held steady and in volume terms it actually rose over the same quarter last year. Leased-line revenues were down, suggesting the same factors were at work here. Lan Communications, Eircom’s network integration arm, contributed revenues of €9m, an increase of 12pc on Q1 2005.

Eircom’s outgoing chief executive Dr Philip Nolan said that the results showed a strong performance across the business with revenue and EBITDA growth in both fixed line and mobile segments. He paid tribute to the company’s management team and staff and spoke of the “great privilege” in leading the telco through the transformational period.

By Gordon Smith