BT to unbundle more exchanges

26 May 2005

In what was his 12th and final annual results press briefing for BT’s Irish operations, outgoing CEO Bill Murphy (pictured) said the company is planning to unbundle 13 additional local loop exchanges by the end of the year and is in talks with the CEOs of O2 and Vodafone about establishing a BT mobile virtual network operator (MVNO) in the Irish market.

For the full year to the end of March, Murphy revealed turnover grew 29pc year on year to €372m, compared with €289m for the same period last year. Earnings before interest, taxation, depreciation and amortisation increased 13pc to €43m with the company generating its first-ever operating profit in the final quarter of the year. The company said operating costs were reduced by 4pc throughout the year.

The company said it has reduced losses from €15m more than a year ago to breaking even this year and plans to generate operating profits in the year ahead. Andrew Tackaberry, chief financial officer at BT Ireland, said the company’s capital expenditure was up 2pc during the year to €33m.

Murphy said the company’s 900 Irish staff will each receive a bonus of between 8pc and 13pc to reflect the strong results. Murphy is returning to BT’s headquarters in the UK where he will take up a senior position with the company.

Commenting on the results, Murphy told journalists: “We are in a much different position than three years ago. This is a very good set of results in a very competitive market and we are very proud of that. We expect good things in the year ahead.”

Murphy revealed BT Ireland now has 35,000 broadband customers, has unbundled its 40th exchange and has made a commitment to unbundle a further 13 exchanges from Eircom in the year ahead. He said by the end of March next year, the company intends to have unbundled at least 53 exchanges, enabling it to provide broadband to approximately 60pc of the Irish market.

As well as the 35,000 broadband customers, Murphy said some 100,000 customers were still on dial up, and he was confident of transferring these customers to broadband. “I am optimistic about what’s going to happen in the consumer space this year.”

Tackaberry said the company recorded significant growth in its wholesale business and is currently providing services to all other licensed operators (OLOs).

Reflecting on the Irish telecoms market, Murphy said: “It is a growth story. The market is buoyant and we are executing our strategies very well.”

BT Ireland’s chief operating officer, Mike Maloney, envisaged as the likely successor to Murphy in the chief executive role, commented: “The company is in great shape. Our corporate sales division is rapidly becoming a vendor of choice for businesses with multiple sites and covering multiple geographies. We are currently talking to CIOs in major enterprises across Ireland.”

During the year BT Ireland landed a host of landmark business contracts that contributed to business growth of 35pc over the previous year. Major contracts included AIB, Analog Devices, Bank of Ireland, C&C, the Department of Education and Science, EDS, GFS, Greencore, Ingersoll-Rand and O2.

On BT Ireland’s plans to become an MVNO, Murphy said: “Once the Government has decided, we will move quickly. The reality is that customers in the telecoms business want mobility. We are optimistic and we have got good indications from the CEOs of the local mobile operators. That will be a good mix.”

In response to a question as to whether BT’s arch-rival Eircom will buy Meteor, Murphy said he believed it makes strategic sense for Eircom and that it would encourage the existing mobile operators to rapidly roll out MVNO services as a channel for more market reach in the face of competition from the incumbent.

By John Kennedy