Eircom revenues down with no pick-up in sight

bealtine

http://www.rte.ie/news/2010/1126/eircom-business.html

Eircom has reported a 5.6% fall in quarterly revenues as the company's adjusted earnings before tax and interest were flat at €168m.

Revenues for the company's first fiscal quarter ending September fell to €442m from €468m and Eircom said its net debt remains high and warned that its financial covenants may be breached within the coming 12 months.

Eircom said it sees no signs of growth or increased spending by customers, adding that it does not see this situation changing in the near to medium term. It said it continues to manage its business in a 'difficult and uncertain economic environment'.

The company reduced the number of its employees by a further 117 since the previous quarter and it said that labour resources, including contractors, have fallen by 1,675 since March 2009.

Eircom said these reductions have helped its competitive position, but much more remains to be done as part of its three year transformation programme.

Eircom said that 280,00 customers are using its 8Mb uncongested broadband service. It added that total DSL subscribers across retail and wholesale stood at 695,000 by September.

The number of fixed lines continue to fall. The company lost 20,000 lines in the last quarter, down from 23,000 lines the same time last year. Voice traffic minutes fell by 12% on the same time last year.

At its Meteor mobile phone division, revenues and profits fell for the quarter due to lower average revenues per user. This was mainly due to new lower priced plans, mobile termination rate reductions and changes to the traffic mix. Total mobile customers stood at 1,036,000 by the end of September.

Mobile broadband customers stood at 45,000 by the end of September, up 28,000 on the same time last year.

Eircom launched its second mobile offering in September and said the new eMobile service will complement its Meteor service.

bealtine

bealtine wrote: »

Eircom has reported a 5.6% fall in quarterly revenues as the company's adjusted earnings before tax and interest were flat at €168m.

To my mind this fall in revenue clearly demonstrates that the cost of an eircom phoneline is simply way too high and not at all competitive, when compared to mobile.
The vast majority of eircom lines now are simply used for broadband (except for pensioners maybe) and should be priced to be more competitive and similar to line rental charges in other EU countries. This will drive up the line penetration considerably.

So in effect line rental should fall to bring back customers or the risk is that people will totally abandon eircom for phone calls and all that will be left will be DSL provision and end this absurd line rental pricing.

watty

Also Mobile data packages are seriously under priced. Look at 3's losses.

DSL is haemorrhaging to Mobile.

drunkmonkey

What happens if the default on their financial covenants, are they bust?

I don't know how they could say emobile complements meteor, their in direct competition. My brother called meteor to change his billing address and they moved his meteor bill to emobile over the phone.

I'd guess meteor is going to be pillaged by emobile and then the network sold next year to try and pay some debts.

watty

eMobile is just a rebranding of Eircom Mobile, which is just really alternate branding of Meteor because Eircom have a daft idea that only youngsters buy Meteor and the Oldies will buy eMobile

Meteor / eMobile "success" in selling Mobile Data just makes eircom LESS profitable. But they feel they have to "match" O2's, 3's and Vodafone's daft Data package marketing that is only subsidized by mobile voice.

But 3 don't HAVE the Mobile voice customers. Hence they are potentially in a worse state than eircom, while helping pillage eircom DSL with their "misnamed" "Broadband" (really Mobile Internet).

Internet is not equal to Broadband and vice versa just because it's not on an analogue dialup line!

Stinicker

I understand they also made another voluntary redundancy offer today to their employees.