Ireland is a difficult market for telecoms, says BT

15 Feb 2007

The Republic of Ireland is a difficult market for telecoms, the country’s second largest telecoms operator BT told It warned that the market faces a number of competitive and regulatory challenges.

BT was responding to accounts published by the Companies Office that revealed the company has developed losses of €1bn.

The company – which employs 3,000 people on the island of Ireland of which well over 1,000 are in the Republic – would not comment on speculation that disappointing performance in its consumer division may lead to job cuts.

But the underdeveloped state of the Irish telecoms market hasn’t been kind to the company.

There is consternation amongst other licensed operators (OLOs) that the long awaited Telecoms (Miscellaneous) Bill that will grant extra powers to ComReg – due originally in 2002 – may be too late. Last week, Magnet Networks revealed it was taking its emphasis off consumer LLU in order to focus on more profitable lines of business.

Despite investing heavily in a local loop unbundling strategy to unbundle over 48 exchanges around Ireland, with more planned, BT has only 2,000 LLU customers after almost a decade of deregulation in Ireland. By comparison in the North, where BT is the incumbent, the company has achieved 100pc LLU.

In the Republic BT is effectively the largest reseller of Eircom’s bitstream broadband product with over 55,000 customers using the service and the company derives a slight margin for doing so.

In November BT said it planned to invest a whopping €500m in its 21st-century network infrastructure across the entire island of Ireland over the next five years. This would involve boosting the number of unbundled exchanges in the Republic from 45 to 70-80. At the time BT Ireland chief executive Danny McLaughlin labelled the LLU situation in terms of automation as “torturous.”

In a statement to last night, BT said: “The accounts published by the Companies Office relate to our Republic of Ireland business for year ending 2005/2006. These are historical numbers and do not reflect our current all-island business and growth plan.

“The Republic of Ireland is a difficult market and we face a number of competitive and regulatory challenges.

“However as we have previously stated, we are committed to our growth strategy and continue to invest in all the market segments in which we operate, including our consumer business,” BT stated.

By John Kennedy