Seizure of quad play opportunity fuels Eircom Q1 momentum

28 Nov 2014

Eircom today reported first-quarter revenues of €313m, down 3pc year-on-year but up 1pc on the last quarter. The quad-play company saw growth across all segments, including broadband, mobile, fibre and TV.

Eircom reported EBITDA (earnings before interest, taxes, depreciation and amortisation) of €114m, down 6pc it says is due to investment in subscriber growth.

This was balanced by a 6pc reduction in operating costs and an 18pc reduction in payroll costs.

Eircom says it now has 731,000 broadband connections, up 8pc on last year with 13,000 connections being added during the quarter.

It said fibre optic uptake is strong, with 172,000 fibre customers now paying for the service.

In terms of the company’s foray into television, Eircom said 28,000 homes have signed up for its eVision TV service.

On the crucial mobile front, Eircom said it now has 91,000 4G customers. It said post-pay subscriber growth was up 16pc during the quarter.

A key milestone reached during the quarter was the passing of the one-millionth premises with fibre technology.

Eircom is currently embracing the momentum of being Ireland’s current full quad-play player – providing TV, phone, broadband and mobile services – but no doubt it is eagerly watching developments as UPC next year begins offering mobile services as well as looming competition from the ESB/Vodafone joint venture on the fibre front.

It appears to have a fight-back plan of its own: last month, Eircom revealed plans to connect homes and businesses in 66 Irish towns with speeds of up to 1,000Mbps or 1Gbps.

And, with the Irish Government pressing ahead with plans to roll out fibre to 600,000 homes and 100,000 businesses from next year, the quad-play market space is going to be very interesting, with one real winner: the consumer.

Maintaining momentum

Eircom’s newly appointed CEO Richard Moat said the company maintained its momentum in the first quarter through focused commercial execution and continued investment in its fixed and mobile network.

“The rate of revenue decline has slowed significantly, an encouraging sign of stabilisation, helped by two consecutive quarters of mobile revenue growth. Our bottom line performance remains in line with expectations, following a decision to make commercial investments this quarter that will deliver long-term growth.”

Moat said Eircom is on course to deliver a fibre footprint of 1,600,000 premises by June 2016, capable of supporting broadband speeds of up to 100Mbps.

“We also recently announced plans to bring 1Gbps connectivity to 66 towns across Ireland using fibre to the home (FTTH) technology, demonstrating the scalability and future-proofed design of our network investment.

“Mobile network capability continues to improve and has been a key driver in the transformation of our mobile customer base, which now has 41pc of customers on post-pay contracts. At the end of September we had 91,000 4G customers, and we have recently launched 4G services for prepay.”

Moat said Eircom is currently the only operator to offer quad-play bundles.

“Our leading network capability and the addition of services such as eVision On Demand means that we offer the most compelling bundles in the market. The retail customer base, comprising fixed and mobile customers, stood at 1,896,000 at 30 September 2014 and includes 1,065,000 mobile customers.

“The total customer base, including Wholesale customers, is 2,373,000 at 30 September 2014. Consumer market Revenue Generating Units (RGUs) for the period stood at 1.8 per customer, up from 1.6 per customer for the corresponding period,” Moat said.

Momentum image via Shutterstock

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