Two years after exiting examinership, Eircom is firing on all cylinders and is ahead of the market as the only quad-play operator in Ireland. CEO Richard Moat intends to sustain this momentum.
As Moat describes it, after abandoning IPO plans after a sober and rational assessment of the stock markets this year, a sort of reset button has been set on Eircom.
As its most recent financial results show the company is continuing to reduce losses and headcount and if its remains on this current trajectory is perhaps a year or so away from a return to profitability.
Moat is determined the operator does not deviate from this path.
From a technology viewpoint, the incumbent operator that exited examinership, has never been more technologically relevant in terms of its infrastructure investment and the fact that it is the only quad play – that’s internet, phone, mobile and TV – operator in the country at present.
No doubt other operators such as UPC intend to follow suit, but as Moat puts it Eircom is already reaping the rewards.
“We’ve invested €750m over the past two years and another €300m this financial year, creating a whole new platform for products and services that we never had before.
“We’ve launched a high-speed fibre product that has passed more than 1m homes. We were the first to launch 4G on mobile.
“We developed an IP TV capability that we never had before and a new billing platform called Springboard to underpin that to allow triple play and quad play billing.”
The rewards of this quad play strategy come in the form of reduced churn.
“We are very focused on bundles because we think this is the future. It is what creates more stickiness and lower churn. Customers on these products have half the churn of customers on standalone products and they spend more with us and so the customer life-time value is much greater.
“That’s the life-blood and the future of the business.”
In it to win it
Overall, Eircom plans to spend €1.5bn on upgrading its infrastructure to reach 1.6m homes with fibre broadband. This includes a new plan to increase fibre broadband speeds to 1Gbps in 66 towns through fibre to the home.
The company also intends to compete aggressively to be the Government’s partner in a plan to bring fibre broadband to 600,000 homes and 100,000 businesses across Ireland as part of the National Broadband Plan.
“We are going to go to 1.6m homes and premises passed by fibre which we intend to achieve by the middle of 2016. At that point we will have covered more than 70pc of all the homes in Ireland.
“Having said that there are 700,000 premises beyond that that would still be without fibre coverage.”
He said Eircom has a large team hard at work on the company’s proposals for the National Broadband Plan.
Moat said that Eircom’s suggested solution to achieving the National Broadband Plan is to go all the way with fibre to the home and business and that no wireless solution will be good enough or provide the future-proofing that the Government’s €512m investment will require.
“We think it is vital to be the winning player in the competition and we think we’re the company most strongly positioned to achieve that.”