Meteor burns brightly amidst tough year for Eircom

27 Aug 2009

Ireland’s largest telecoms operator Eircom today reported Q4 revenues of €479m, down 6pc on last year. For the full year group revenues of €1.9bn were achieved, down 3pc on 2008.

The company, which is currently the takover target of Singapore Technologies Telemedia, revealed that its mobile wing Meteor is continuing to perform well with a 3pc full year increase in mobile revenues to €496m. Mobile EBITDA (earnings before interest, taxes, depreciation and amortisation) of €124m was up 11pc on the previous year.

For the Eircom group, operating costs were down 4pc reflecting lower pay and costs. Eircom’s headcount is down 12pc or 933 people, since June 2007.

The overall group achieved EBITDA of €692m, down 1pc on last year.

Eircom reported gains in broadband subscribers with numbers now standing at 665,000, up 72,000 year on year. Retail DSL customers stood at 477,000, up by 54,000.

Mobile wing Meteor breached the 1m user base for the first time, with 1.06m customers, up 38,000 in the year. Post paid customers accounted for 13.5pc of the base.

Average ARPU for Meteor was €37.30, down 6pc on the previous year.

Eircom’s capital expenditure outflow was €335m, which the company used to focus on increasing fixed and mobile broadband capacity, including next generation networks, 3G networks and the rollout of a Tetra Digital Radio Network.

The company registered a goodwill impairment charge of €720m which it attributed to the deterioration of the economic environment and its business outlook. It added the company pension scheme’s deficit now stands at €435m.

Eircom’s net debt stood at €3.3bn and cash on hand was €333m.

“Looking forward, we are on track to remove €130m from our annual operating costs by the end of the 2010 financial year,” explained Eircom’s newly appointed chief executive, Paul Donovan.

“The economic environment is challenging, with the continuing slowdown in activity impacting both volumes and revenues. Customer growth and retention will remain key objectives for the business, which we expect to achieve through increased value and service.

“We continue to see growth in broadband, albeit at a slower rate. Fixed Line DSL customers increased by 72,000 in the year, to 665,000. Over 61pc of our retail DSL customers are now on speeds of 3Mbs or greater, up from 12pc a year ago, and we are planning to increase our basic product speed to 8Mbs during the current year. Our successful launch of Meteor mobile broadband in March had won 9,000 new customers by the end of June.

“Cash investment in fixed assets was €335 million in the year, delivering on our commitment to spend to over €1bn in the past three years. We continue to invest in rolling out faster broadband and 3G, in increasing capacity by rolling out fibre in our fixed and mobile transmission networks, and in building the new nationwide Tetra network for the country’s emergency services,” Donovan concluded.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years