company_name = eircom Group plc.
company_| company_type = Unlisted
public limited company- owned by Babcock and BrownLimited and Eircom ESOP Trustee Limited
company_slogan = "Go Further"
foundation = Dublin,
Ireland( 1984) (as Bord Telecom Eireann plc.)
location = flagicon|IRL Dublin,
Rex Comb(CEO); Pierre Danon(Executive Chairmandesignate); Anthony O'Reilly (Outgoing Chairman)
num_employees = 6,543 (2008)
Telephone, Mobile telecommunications, Internet, burglar alarmservices
revenue = €2,602m (EUR)
subsid = Meteor Mobile Communcations,
eircom Net (
LAN Communications, eircom NI, eircom UK
homepage = [http://eircom.ie/ eircom.ie] |
eircom Group plc is the largest
telecommunicationsoperator in the Republic of Ireland.
As Bord Telecom Éireann, the company was (until 1999) a
state monopoly; as a private company it continues to dominate many telecommunications areas, its main competitors are UPC Ireland(owner of Chorus & NTL networks) which operates its own cable network, BT Ireland(formerly Esat BT), accessed via eircom's network and fibre, Digiwebwith mostly wireless (but some fibre & LLU too), and Magnet Networksand Smart Telecom, with a mix of LLU/ GLUMPfrom eircom and fibre. eircom currently operates the fixed-line telephone network, a GSM (2.5G) mobile telephone network Meteor (acquired from AllTel (Western Wireless) in 2005) and act as an internet service provider(ISP) "eircom.net". eircom also operate a property alarm installation and monitoring unit called "eircom Phonewatch". eircom broadband had a 49% share in 2006 and eircom fixed voice lines 72% in 2006 [http://www.siliconrepublic.com/news/news.nv?storyid=single7544 Comreg via Silicon Republic] . Current market share analysis is at [http://www.comreg.ie comreg's site] by late 2007 eircom added their 500,000th DSL subscriber but broadband share may have fallen to 44% due to growth of Fixed Wireless, Cable and Fibre services (see [http://www.enn.ie/article/97275.html enn reports Comreg Sep. 2007] ).
Eircom operate the largest fixed-line telecommunications network in the
Republic of Ireland, under licence from the Commission for Communications Regulation. Most homes and businesses in the state are connected by this network. A full range of telecommunications services is provided on the network including Business IP, its MPLSplatform. Their ISP division, eircom net, provides dial-up services, as well as broadband (see broadband roll-out, below) services. eircom Phonewatch provides burglar alarmand home monitoring services. Any Alarm monitoring products using SMS are "hardcoded" to work with eircoms SMSC, so will not work on Digiweb, BT, Smart, UPC or Magnet phone networks. DECT SMS handsets are also preprogramed for eircom's SMSC. Any competing phone service that is not just CPS of eircom must provide their own SMSC, but even when they do, consumers may be unable to migrate from eircom due to SMSC numbers in equipment that can't be reprogrammed.Fact|date=November 2007
Eircom's mobile arm, Meteor, provides a full range of
GSM-based mobile communication services throughout the Republic of Ireland. Its GSM network operates at 1800 MHz and 900 MHz ranges, as the earlier GSM licences fully utilised the 900 MHz band. GPRSand EDGE data services are also available. Meteor provides both bill-pay (contract) and pre-pay (non-contract) plans and has approximately 19% of the Irish mobile market, with 962,000 cellular subscribers on the Meteor Network. The company currently uses EDGE technology on its network and has received a 3G(UMTS) licence recently removed from eircom's competitor, Smart Telecom. (This requires 33% of the population to be covered by 3Gby September 2008.)
As an operator with significant market power, eircom is required to provide a number of wholesale products to other operators and to switch calls onto other phone networks. Many broadband products offered by other operators are resales of the eircom product.
eircom has been subject to much criticism in the performance of its activities. See the criticism section below for more details.
The company was formed in
1984as Bord Telecom Éireann, under the Posts and Telecommunications Act 1983. This article deals mainly with the post-privatisation eircom. For details of the company during its time as a state-sponsored body, see the Telecom Éireannarticle.
Due to EU laws requiring the opening up of the Irish telecommunications market, Telecom Éireann was privatised, this was very controversial and subject to much debate. The process began in
1995, and by July 1999the government had disposed of virtually all of its shareholding [http://www.oecd.org/dataoecd/30/57/2510988.pdf] . eircom plc was then floated on the Irish Stock Exchange, London Stock Exchange, and New York Stock Exchangeon July 8 1999and small/first-time investors were encouraged by the Irish Governmentto buy shares. The share price was set at €3.90. It later reached a high of €4.80, a 23% increase. Those initial investors that held onto their shares until July 2000 received a 4% bonus share allocation.
The eircom flotation is considered to have been an example of a
stock market bubble— after the initial hype of the flotation died down, the stock price fell rapidly. Many of the 500,000 small investors were angered by the significant financial loss they incurred, blaming the government for not sufficiently warning them of the risks inherent in stock market investment. This may have been a factor in Mary O'Rourke, the then Minister for Public Enterprise losing her seat in the general election.
Since privatisation eircom penetration of landlines has fallen from 82% to 69%. During this period there has been a large increase in Mobile Phone ownership and a significant rise in Line Rental to the highest in Europe.
Disposal of Eircell, going private and reflotation
2001, eircom sold its mobile subsidiary Eircell to Vodafone. The company was transferred to a separate entity, Eircell 2000 plc which was then sold to Vodafone via a share swap. eircom shareholders got 1 Eircell 2000 share for 1 eircom share. The conversion rate was then 0.9478 Vodafone shares for every 2 Eircell 2000 shares. This left the eircom shareholder with not only shares in eircom, but Vodafone also.
After the sale of Eircell, eircom itself was believed to be undervalued and became the subject of a bidding war between two consortia - the E-Island consortium headed by
Denis O'Brien, and the Valentia Consortiumheaded by Tony O'Reilly, the chairman of Independent News and Media. Eventually in November 2001the company agreed a recommended offer of €1.335 per eircom share. eircom plc was delisted from the stock exchange, become eircom Limited, a private limited company by sharesand a subsidiary of Valentia, and O'Reilly took the reins as Executive Chairman (a role he pursued with vigour, even holding management meetings at his Castlemartin home).
19 March 2004the company returned to the stock market (although the company being listed, eircom Group plc, was in fact a new holding company, and was registered in England and Walesrather than the Republic of Ireland). The company floated at €1.55 a share, but dipped on initial trading before recovering to trade above its float price.
Return to Mobile - Acquisition of Meteor
2005, several Irish newspapers reported that Meteor Mobile Communciations, the third mobile phone operator, was up for sale by its owners, Western Wireless. It was considered that this afforded eircom an opportunity to re-enter the mobile communications market. On 9 July 2005it was reported by The Irish Timesthat there had been three bidders for Meteor: eircom, Smart Telecom, and a consortium led by Denis O'Brien. On 14 July 2005, RTÉ Newsreported on their [http://www.rte.ie/business/2005/0714/meteor.html business website] that Denis O'Brien had withdrawn from bidding, and that it was understood that eircom was the top bidder at €410m. On 21 Julyit was announced that Smart Telecom had also withdrawn, leaving eircom as the sole bidder. eircom announced the agreement to purchase it on 25 July 2005at a cost of €420m. [http://www.rte.ie/business/2005/0725/eircom.html] .
Meteor now has over 1,000,000 customers as of September 2008 and a market share of 20%.
eircom Mobile (MVNO)
As part of their mobile strategy eircom have also launched "eircom Mobile" aimed at the Business market, this is to be complementary to the Meteor division (mainly used by residential wireless customers). eircom Mobile is an
MVNOwhich uses the Meteor Network for its services. [http://www.telegeography.com/cu/article.php?article_id=17730]
2 November 2005it was reported that the Swiss telecommunications company, SwisscomAG, had made an approach to eircom regarding a possible takeover of the company. However on 25 Novemberthe Swiss government announced that it would use its controlling stake in Swisscom to block any foreign takeovers, effectively ending hopes of a bid.
Babcock & Brown
In May 2006 it was announced that eircom was to be sold to the Australian investment group
Babcock and Brownin a deal worth €2.4 billion. The Employee Share Ownership Trust, which represents workers at the company, was to remain a minority shareholder. The sale was approved by shareholders on July 26 2006, and at close of business on 17 August 2006the shares were delisted from the Official Lists of the Irish Stock Exchange and the London Stock Exchange, ending eircom's second period on the stock markets. The same day, Phillip Nolan resigned as chief executive of eircom and on 1 SeptemberRex Comb was officially named as the new CEO. Tony O'Reilly resigned as Chairman and was replaced by Pierre Danon, previously of BT Group plcand JP Morgan Chase.
Possible Disposal of Meteor and eircom Retail Arm?
In the Irish Independent [ Irish Independent Article (20-July-07) [http://www.independent.ie/national-news/owners-of-eircom-to-net-euro18bn-in-breakup-1040455.html] ] It has been reported that eircom's owners
Babcock and Brownare planning to break up eircom Group plc. Retaining the core backbone Network Wholesale Division and selling the eircom Retail and Meteor Mobile Communications Divisions. It is reported that the retail arm of eircom could be worth €1bn and Meteor could be anything around ~€800m. Recently the eircom masts have been sold to Threefoldwith a lease back deal, for about €460M. [http://www.threefold.ie/17/23.html | Threefold acquires eircom Radio Masts]
While eircom retains a virtual monopoly, at around 70%, on fixed line telephony in the State (the only exceptions being those operated by UPC Ireland cable company (formerly
NTL Irelandand Chorus), Digiweb Metro and some fibre offerings from BT, Magnet Networks, Smart and Digiweb). Chorus previously offered wireless telephony but failed to renew their licence) it is required to allow carrier pre-selection (CPS). Introduced in Ireland in 2001, CPS allows subscribers to use an alternative provider for all their calls, without the need to dial indirect access codes or numbers, although they still receive a bill from eircom for line rental. Under a wholesale line rental scheme, it is now possible for customers, to have a single bill from an alternative provider, for example, BT Ireland, including the cost of eircom line rental, rather than continuing to receive a separate one from eircom for this cost. However, unlike the UK, where BT's competitors can now charge less than BT for line rental, it is not yet possible for operators in Ireland to buy the lines from eircom and charge their own rate for line rental, should they wish.
Criticisms of eircom
After the privatisation of eircom, the highly profitable mobile phone division, Eircell, was sold to Vodafone. Some consider this act to be
asset strippingby the large investors with interests in eircom.
Ireland still lags in DSL penetration with 8% broadband penetration compared to the EU25 average of 14% [http://www.comreg.ie/_fileupload/publications/ComReg0652.pdf] (Comreg, Q1 2006, Page 21).
eircom's line rental charges have increased over the years, now standing at €24.18 per month. However in the residential market, at c.$330/ppp, this is 10% more than the EU average of $300/ppp [http://www.comreg.ie/_fileupload/publications/ComReg0652.pdf] (Comreg, Q1 2006, Page 15).
eircom announced in June 2007 that from the 30th of July line rental charges would increase by €1.18 bringing line rental charges - already the most expensive in Europe to a total of €25.36 per month for a PSTN analogue line, one source indicated it was the highest line rental charge in the world. [ [http://www.independent.ie/unsorted/features/story-of-the-week--higher-charges-for-phone-users-are-on-the-line-in-telecoms-sale-1041952.html Irish Independent, 21 July 2007, Higher charges for phone users are on the line in telecoms sale] ] Also announced was an increase of between 4.8 and 4.9% on local and national calls.(electricnews.net 15-06-2007 http://www.electricnews.net/article/47455.html. These moves have been criticised as excessive profit-taking and abuse of a dominant position in the market.
As of Q2 2006, 370,000 customers have broadband, 260,000 on DSL and the others on a mix of FWA, Cable and satellite. [http://www.comreg.ie/_fileupload/publications/ComReg0652.pdf] (Comreg, Q1 2006, Page 19). On 1st November 2007, eircom announced their 500,000th dsl customer [http://www.finfacts.com/irelandbusinessnews/publish/article_1011669.shtml eircom press announcement via finfacts] .
Communications in the Republic of Ireland
List of Irish companies
* [http://www.eircom.ie Official site]
* [http://www.eircom.net eircom net]
* [http://www.meteor.ie Meteor Mobile Communications]
* [http://www.eircom.ie/mobile eircom Mobile]
* [http://www.eircomwholesale.ie/ eircom Wholesale]
* [http://www.phonewatch.ie/ eircom PhoneWatch]
* [http://www.eircom.co.uk/ eircom UK]
* [http://www.rte.ie/tv/scannal/Eircom.html Information about the privatisation of Eircom and how shareholders felt misled]
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