Eircom to outsource network management in €20m spend

12 Jul 2004

Eircom has issued a tender for bidders for a network maintenance contract that according to reports is estimated to be worth up to €20m a year. The contract, which involves civil engineering work in the Eastern and Western regions of Ireland, is aimed at enabling the incumbent telco to cut costs and increase profits.

Eircom currently spends around €50m a year to maintain its telecom s network. It is understood that the contract has attracted bids from at least six firms, including Swedia, Clarkes and a UK firm called Enterprise.

Separately, it has emerged that Eircom has renewed a controversial three-year framework maintenance agreement with a subsidiary called TE Services, which holds around 50pc of the estimated €50m worth of contracts Eircom issues every year to keep its network up and running.

TE Services was originally set up by Eircom to take advantage of opportunities in the UK, and was later used to persuade staff to leave Eircom and get off its payroll. Eircom currently holds a 35pc stake in TE Services and Eircom’s director of wholesale networks sits on TE’s board.

TE Services, which has a turnover in the region of €35m annually, recently won a deal to provide network maintenance services to E-net, the company in recent weeks selected to manage the Department of Communications, Marine and Natural Resources’ countrywide chain of metropolitan area networks.

By John Kennedy