Esat BT turnover up 20pc, launches VoIP services

20 May 2004

Ireland’s second largest telecoms provider, Esat BT, has reported that its 2003/2004 turnover rose 20pc to €289m. The company also introduced Ireland’s first hosted voice over IP (VoIP) service for the SME, corporate and public sector, with residential VoIP services to follow in the next three to four months.

Ebullient Esat BT CEO Bill Murphy (pictured) described the current market as a “challenging market, but the good news is it is a more competitive market.” Murphy added that the company expects to turn a profit in the coming financial year 2004/2005.

In the course of the last 12 months, the company secured major business contracts in the IT sector, including the seven-year €151m outsourcing contract with Bank of Ireland. Earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped 90pc from €20m last year to €38m this year. Esat BT’s gross margins were up 2pc to €111m.

The company’s chief financial officer Tom Byrne said that net losses at Esat BT have been reduced substantially to €42m this year from €159m a year ago. CEO Bill Murphy emphasized the significance of this: “Two years ago we were making losses of €500m.”

Operating expenses at Esat BT were cut by 18pc and Byrne said that the company made major advances in cash management.

Murphy said that the company has close to 10,000 broadband customers and that improvements in the regulatory environment, a reduction in aggressive win-back tactics by Eircom and an indicated willingness on the part of the Government to spend on voice and data services with other licensed telcos other than Eircom are helping Esat BT’s bottom line. “We are confident that we can win business from the Government in the months ahead. We reckon we could save the Government up to 20pc on what they are currently spending on voice and data services.”

In another major development, Esat BT introduced what it describes as Ireland’s first hosted VoIP service for SME, corporate and public sector customers. Product director Peter Evans said that the take up of multi-protocol label switching (MPLS) networks has addressed many of the historical issues associated with VOIP, enabling customers to prioritise network traffic and allocate prioritisation for voice, consolidate voice and data on a single network and lower overall operational costs.

He said that a typical SME or public service with a number of branches could route calls across a wide area network (WAN) and communicate internally for free while calls outside the network would be charged as normal. “The advantage would be for a company with offices overseas, if they wanted to call an overseas customer they could have the call routed from the overseas office to the local trunk network and the call would be charged at local rates rather than international rates,” Evans said.

Evans added that Esat BT’s 10,000 residential broadband customers would be able to use the service within the next three to four months. Murphy added that a sample VoIP product would be that all international calls using VoIP enabled handsets or headsets connected to computers would cost as little as €10 a month.

“We are back in the consumer space and we are pushing quite hard with our broadband and future VoIP services. If I was sitting where Eircom was sitting right now I would be quite concerned. We have something that businesses and consumers are really going to want,” Murphy concluded.

By John Kennedy