It's A Two Horse Race For Meteor

Mr_Man

According to RTE it is now a two horse race between Smart and Eircom. Eircom would seem to be in pole position, but at what cost? Given the cash they'll have to raise to pay for this company, pressure on funds is going to intensify and could result in even fewer funds going into the infrastructure.

M

bringitdown

Meteor would loose me as a customer if Eircom won.

dahamsta

bringitdown wrote:

Meteor would loose me as a customer if Eircom won.

They'd bring bogloads on to replace you via the landlines though, sadly. But Smart need this by all accounts.

Credit where credit is due, Meteor have played a cracking game with the interested parties over the past couple years. I reckon they deserve a tidy profit for the way they've played them all against each other.

adam

oscarBravo

bringitdown wrote:

Meteor would loose me as a customer if Eircom won.

It would put me in a difficult position too. Meteor coverage is about perfect at my house, whereas Vodafone is crapola. I can't imagine anything that would entice me to switch to O2 at the moment.

All in all, I'm happy as a Meteor customer - will I be forced to swallow my pride and stay on as an Eircell (!) customer?

Sarsfield

Guys, guys, it's just business.

Feel free to hate Eircom, but if they offer the product that's best for you would you still drop them just because they're Eircom? To be honest, that would be stupid! Bear in mind they're all the same (businesses). Eircom is just bigger therefore can throw its weight around more.

oscarBravo

Speaking only for myself, it stopped being "just business" a long time ago. Now it's a question of principle.

That's not to say I'd cut off my nose to spite my face, but it would hurt to give any more money to Eircom.

zuma

If eircom get Meteor then they will milk it for all its worth!!!

Personially I would prefer those who use mobiles to pay a load, if it means eircom leave the landline infrastructure alone...or actually improve it with some of the profits from meteor.

Mobile operations are INCREDIBLE profitable.

If Smart get meteor then they will have a nice little profit making machine and might invest it into the rest of their growing business.....how does 8Mbit ADSL2+ sound???

Blaster99

I don't think it matters who buys Meteor. It's just business, they will try to make as much money as possible and that's that. I suppose Meteor in Eircom's hands would have easier access to backhaul so it might be cheaper to roll out better coverage or 3G.

viking

As I mentioned in another thread, the SBP reported the following:

<snip>Shares in Eircom have dropped in recent weeks amid concerns that it will pay too much for Meteor. The spotlight has fallen on how Eircom will finance the acquisition if it were to outbid Smart Telecom [and Denis O'Brien] in the auction.

...

Brid White, an analyst at Merrion Stockbrokers, said Eircom had only €342 million in wriggle room for it not to breach the most restrictive debt covenants with its bond holders.

Consequently, if it were to pay as much as €400 million to €450 million for Meteor, Eircom would need to raise money from other sources to finance the acquisition.

Eircom would also need to spend €47million in spectrum and administrative costs in the first year to regulator ComReg if it were to bid for a 3G phone licence in the coming weeks.</snip>

If we are down to sealed envelopes between Smart and Eircom, then Eircom are hoping for the sub 400m mark and hoping that they still outbid Smart. Otherwise its external investors time.

Don't forget that Western Wireless have said that if the price ain't right then they won't be selling, so Meteor may not even be sold yet...

zuma

viking wrote:

As I mentioned in another thread, the SBP reported the following:


If we are down to sealed envelopes between Smart and Eircom, then Eircom are hoping for the sub 400m mark and hoping that they still outbid Smart. Otherwise its external investors time.

Don't forget that Western Wireless have said that if the price ain't right then they won't be selling, so Meteor may not even be sold yet...

I think Smart have enough for a €350-€400 purchase...but it appears Meteor is going into the €430-€440 territory!!!
Eircom will win the bidding process and have a VERY large hole in their finances!!!
What are the chance that eircom will raise line rental to the magic figure of €30 sometime this year?....twice the EU average!!!

Mr_Man

Eircom

cannot raise line rental by more than then CPI this year; Comreg finally broke it out into a seperate 'basket' after the last gouging of the Irish Consumer caused a massive uproar.

M.

zuma

If there was to be a rise this year...what would we, the consumer, end up paying each month???

How do Ameiricans,eircom is basically a US company now, manage line rental??
Also...shouldnt costs be going down in eircom as technology improves and such things???

damien

zuma wrote:

What are the chance that eircom will raise line rental to the magic figure of €30 sometime this year?....twice the EU average!!!

I think there's more chance of eircom making me CEO than that happening. The DCMNR and ComReg are still hurting after the line rental increases. If they were to both allow increases in the next two years they will be destroyed by the media and certain consumer groups

Anyways, there's an election almost around the corner. Do you think Dempsey would get an easy time known as the man that increased the highest line rental in the EU to a higher amount again?

With that in mind eircom will need to find the money for their loans from somewhere, which may mean even less investment in their copper infrastructure. Lucky the USO they have isn't very restrictive when it comes to screwing the consumer over so they have had an easy ride on the copper side of things, I doubt they'll have the same thing on the mobile side.

I'm sure too that o2 and Vodafone will use all their regulatory and legal muscle to make sure that the network termination costs eircom charge the newly accquired meteor and viceversa won't give eircom/meteor any advantages, so no money there.

Oh it will be fun times ahead. Anyone think the Competition Authority will get involved?

damien

zuma wrote:

shouldnt costs be going down in eircom as technology improves and such things???

Indeed, as well as making the eircom organisation more efficient through better work practices and more procedures. They've been very slow to bring that about.

JTMan

Smart have bid sub €400 apparently so Meteor seems there for Eircom to take for around €440 M.

dahamsta wrote:

They'd bring bogloads on to replace you via the landlines though, sadly. .

When BT re-entered the mobile market it offered packages that tied your landline bill to the mobile bill. The packages failed to attract masses of customers. Customers did not want the bills tied. However, when BT Mobile started heavly discounting the existing operators and offered mass market products it succeeded.

Land Line + Mobile operation does not equal lots of extra customers.

jesus_thats_gre

Fungus wrote:

When BT re-entered the mobile market it offered packages that tied your landline bill to the mobile bill. The packages failed to attract masses of customers. Customers did not want the bills tied. However, when BT Mobile started heavly discounting the existing operators and offered mass market products it succeeded.

Land Line + Mobile operation does not equal lots of extra customers.

BT did this as an MVNO though. With Vodafone I think? Eircom seem to be doing everything in their power to avoid this situation here..

Eircom owning the infrastructure may be a very different kettle of fish..

zuma

But dont Meteor piggyback on O^2's infrastructure anyway to reach rural/low population density areas???

dahamsta

jesus_thats_gre wrote:

BT did this as an MVNO though. With Vodafone I think? Eircom seem to be doing everything in their power to avoid this situation here.

That and Eircom have a much larger landline market - almost all of it of course - which they'll try to target via the bill. (Whether they should be allowed do that is another matter entirely, but they are still doing it.) And if Eircom is good at anything, in a relentless, ruthless way, it's marketing. The Company Formerly Known As Esat is absolutely rubbish at it.

zuma wrote:

But dont Meteor piggyback on O^2's infrastructure anyway to reach rural/low population density areas???

I was under the impression that they were still building out, at a prety rapid rate, in an effort to negate this as soon as possible.

adam

SparkyLarks

Ther are a lot of buisnesses(esp the larger ones) that wouldn't sign up to Metor, or Smart.
If eircom win the bid they will be looking at getting existing Land line customers to transfer their mobiles. The'll especially be targeting large accounts. Buisness that have hundred of mobiles like ESB Bord Gais, Kerry Group......

Those same buisness won't transfer to a Smart Owned Meteor.
So there is a lot more money to be made for Eircom, than ther is for Smart, so from a buisness point of view Eircom can afford to pay a higher proces for Meteor.

Hopefully Eircom arriving as the third operator will help competition. They will be much more powerful than Meteor, in it's current form or Smart owned. vodafone and O2 will need to watch backs and that will hopefully drive prices down.

An maybe just maybe, being the smaller operator will change Eircoms perspective on competition and such like.

Solair

I can't really see how Smart could afford Meteor, they're too small and already stretched beyond stretched trying to rollout their landline/broadband stuff.

Meteor's a small but extremely successful mobile operator at this stage and is giving the world's largest mobile operator, Vodafone, and O2 (one of europe's largest players) a serious run for their money.

Alltel (who bought Western Wireless) are only off loading Meteor as it doesn't quite fit into their US-focused strategy and they would use the cash they earn from the sale in their home market. However, Meteor is their most boyant overseas asset and they're not going to just sell for the sake of selling it.

They've a few overseas GSM networks
European Union:
Tal (Iceland) (sold and merged with Icelandsimi now Og Vodafone)
Tele.ring (Austria) not a huge player. (#4 player, and also for sale)
Meteor (Ireland) (#3 player for sale)
Vega (Slovinia)
The US mobile phone company Western Wireless has accused the Slovenian government of failing to ensure a free market in the telecommunications sector. It is suing the state for 174 million euros in compensation.
After 4 years in the market Vega only managed to grab 2% of customers. The state owned player has >80% and Slovenia's mobile penitration's pretty high approaching Western European levels circa 90%.




Eastern Europe:
MagtiCom GSM (Georgia) - Small

Americas:
Viva GSM (Bolivia) - A county where 6% of the population have a phone.
ComCEL (Haiti) Not exactly a stable part of the world! 1% of the pop. have a phone of any type, the lowest teledensity in the western hemisphere.

Africa:
Westel (Ghana) - Mixture of cellular, paging, long distance, and payphones and Wireless Local Loop.
Cora (Ivory Coast/Cote d'Ivoire) - Network was temporarily shut down due to political conditions. Their HQ was raided and equipment destroyed.


As you can see they've a lot of diverse and non-integrated investments with very few synergies.
Even the european networks are too far away from eachother and don't even have any roaming partnerships etc.

Western Wireless had a strategy to invest in smaller and cheaper to enter European markets and into developing markets where mobile services could take off replacing the need for landlines e.g. in their south american / african markets.

eircom / meteor would be a good fit. It won't make much of a difference to meteor's position they'll still have to be ruthlessly compeditive. It just means that they'll have marketing and infrastructural synergies that will give them a much better edge in the market.






I doubt eircom would even change the name. Even the colour scheme fits! You'd probabally just see an eircom sooshball added to the Meteor logo.
Get rid of the "o" in Meteor and pop in a sooshball.
and stick eircom on top.. and voila you've a mobile division that everyone already recognises.

oscarBravo

yuck.

zuma wrote:

But dont Meteor piggyback on O^2's infrastructure anyway to reach rural/low population density areas???

Yes, but that's a roaming agreement rather than an MVNO situation.

dahamsta wrote:

I was under the impression that they were still building out, at a prety rapid rate, in an effort to negate this as soon as possible.

That's the impression I get in daily use: I'm spending less and less time on O2.

dahamsta

I should add that it can work both ways on Meteor's constant courting of buyers for the last few years: I would've switched to them ages ago, but I didn't want to sign up to a company that's in constant limbo.

adam

Solair

Well as long as they keep providing me with good service at considerably less than the other 2 operators I'm sticking with them. I really don't care who owns them. I mean, do many people know they're owned by AllTel ? Doubt it!

jesus_thats_gre

zuma wrote:

But dont Meteor piggyback on O^2's infrastructure anyway to reach rural/low population density areas???

They use 02's network in places they do not offer coverage themselves. However, they are increasing their coverage foot print all the time and will inevitably not have to depend on O2 at all..

Secondly, if Eircom do take them over, Eircom are in a far far stronger position to increase Meteors coverage to near 100% extremely quickly.. They own that much property etc already.

SkepticOne

Eircom could use create an MVNO to give the impression of 100% coverage overnight. It would not appear to users as a different network. They would not need to bother with investing much. They could still use the Metior infrastructure in the areas where it makes sense.

JTMan

Virgin Mobile have joined Smart Telecom in their bid for Meteor. This is getting very interesting ...

Apparently the winner between Eircom and Smart/Virgin will be announced on July 29th.

dahamsta

Will the new network be called Smart Virgins?



(Dahamsta is a bit of a Richard Branson fan, so he's decided to put aside his Smart Skepticism and root for Smart Virgins. Go Smart Virgins! Oh, and oscarBravo? I find that photoshop utterly offensive.)

adam

JTMan

LOL

Well it is the Sunday Business Post who are going on about Virgin joining Smart to bid for Meteor.

However, the Sunday Times today says it is all over ... Eircom have won the race for Meteor for €410 Million ( http://www.timesonline.co.uk/article/0,,2095-1696908,00.html ). This is the same paper who last week said that Eircom had bid €440 Million.

So who is right the SBP or the Sunday Times?

Sponge Bob

its ongoing all this week , meteor is in play at $500m or higher (dollars yes)

eircomtribunal

Here's the link to the Sunday business post meteor/smart/virgin article:http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=MARKETS-qqqs=themarket-qqqid=6429-qqqx=1.asp

P.

oscarBravo

dahamsta wrote:

Oh, and oscarBravo? I find that photoshop utterly offensive.

GIMP, acksherly. And I'm still scrubbing my hard drive with soap...