Smart claims that 'restrictions' by Eircom cost it €47m a year

molinaalexis

Smart claims that 'restrictions' by Eircom cost it €47m a year

SMART Telecom claimed yesterday in the High Court that alleged restrictions imposed by Eircom on its broadband service are costing it €47m a year.

High Court President Mr Justice Joseph Finnegan was also told that Eircom had served a notice of termination on Smart, effective from Friday next, over interconnector services supplied to Smart.

However, after exchanges between lawyers yesterday, Maurice Collins SC, for Eircom, said his client would continue to provide the services pending the outcome of a court hearing set for October 13.

Earlier this year, Smart brought an application for an injunction directing Eircom to remove alleged restrictions on its broadband service which, Smart claims, are causing it commercial damage.

The matter has been before the court on a number of occasions and directions were issued in relation to the exchange of legal documents.

When the case was mentioned yesterday, Denis McDonald SC, for Smart, said Eircom had now served notice of its intention to terminate from Friday next the interconnecting agreement between the parties.

In those circumstances, his client wished to proceed before Friday with its application for an interlocutory injunction against Eircom.

Mr McDonald said Eircom had previously agreed before the court to continue to provide the interconnecting services on the basis that Smart would make payments on time. There had been some small delays in making payments and one more significant delay, which was due to "a mistake", but all payments had been made.

Mr Collins, for Eircom, said there had been a delay of 96 days in making one payment and lesser delays regarding other payments.

In light of the matter coming before the court on October 13, Eircom would undertake not to terminate the interconnector services prior to the outcome of that court hearing, counsel said.

John Maddock

BoneCollector

this is all an old story since we started, Errcon (a horror story created by the irish government holding all the cards and no one is being very successfull in challanging them..)
Obviously for SMART to survive and prosper would be in the interest of real competition value and service to the irish public.
Question:
How can we help smart!?
since to help them would be to help ourselves..

for one, I would suggest everyone encourage your families, friends relatives, dead grandmothers to move to smart.
Advantages?
it will deminish errcon
increase Smarts presence
give you the service you always wanted
incuding FREE 24/7 phone calls to all other smart customers
so if your entire family tree move over you can take advantage of this.
and so on...
as they say.. its not magic its smart

ALTERNATIVE telecoms provider Smart Telecom has
just reported first-half results showing increased losses. With the shadow of incumbent Eircom looming over it, analysts agreed that until there is a clear outcome to current disputes over broadband development, the future performance of Smart is difficult to judge. Last week, Smart announced a fund-raising of an additional €55m, which has been underwritten by one of its key investors, but its financial performance to date doesn't exactly excite.

While Smart is still relatively young as a telecoms business and in an expensive high growth phase, its continued operating losses don't look very encouraging.

The company has reported losses of €11.2m for the six months ended June 2005, compared with a figure of €4.4m in the same period last year. At an operating level it reported a loss of €10.4m, compared to €4.3m for the same period last year.

While turnover at Smart has increased to €23.7m, the company is saddled with €14m of net debt. Unfortunately for Smart, the challenges ahead for the company are not just about the numbers. Earlier this week, Smart said that alleged restrictions by Eircom on its broadband service are costing it €47m a year. Nobody is making real money in broadband in Ireland yet. Even Eircom is losing around €30m per year given the spend required to make it happen.

But the aggressive stance that Eircom, like many other incumbents in the past, has taken in relation to heel-dragging, continues to make life difficult for this smaller player.

An earlier court decision meant that Eircom didn't have to comply with ComReg's preferred rules. This leaves the prospect of further unbundling of exchanges uncertain in the short to medium term, which is key to the company expanding its broadband business.

The knock-on effect of these delays could prove costly for smaller player Smart Telecom, which has 70,000 residential customers and 2,900 broadband subscribers. "The delays involved in the rolling out of its broadband services has effectively meant that the company has gone from needing €20m in funding to a further €45m," said one Dublin analyst.

Ailish O'Hora