| Type | Unlisted Limited Company – owned by eircom Holdings Ltd. and Eircom ESOP Trustee Limited |
|---|---|
| Industry | Telecommunications |
| Founded | Dublin, Ireland (1984) (as Bord Telecom Éireann cpt.) |
| Headquarters | Dublin, Ireland |
| Key people | Paul Donovan (CEO); Ned Sullivan (Non-Executive Chairman |
| Products | Telephone, Mobile telecommunications, Internet, burglar alarm services |
| Revenue | €2.602 billion |
| Employees | 6,073 (2010) |
| Subsidiaries | Meteor Mobile Communications, Eircom NI, Eircom Net (ISP), Eircom Wholesale, Eircom Phonewatch, LAN Communications, Eircom UK, eMobile, |
| Website | Eircom.ie |
Eircom Group LTD (aka "eircom") is a telecommunications company in the Republic of Ireland, and a former state-owned incumbent. It is currently the largest telecommunications operator in the Republic of Ireland and operates primarily on the island of Ireland, with a point of presence in Great Britain.
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 (which operates its own cable network), Vodafone Ireland (which bought BT Ireland's residential customer base on 22 July 2009 and is accessed through Eircom's network and BT Ireland's fibre), Imagine Communications (Irish Broadband & Gaelic Telecom) and Magnet Networks and Smart Telecom, with a mix of LLU/GLUMP from Eircom and fibre.
Eircom currently operates the fixed-line telephone network, a HSDPA (3G) and GSM/EDGE (2.75G) mobile telephone network Meteor (acquired from AllTel (Western Wireless) in 2005) and acts as an internet service provider (ISP) Eircom.net. Eircom also operates 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.[1] Current market share analysis is at comreg's site.[2] By late 2007 Eircom added their 500 thousandth DSL subscriber but broadband share may have fallen to 44% due to growth of fixed wireless, cable and fibre services.[3]
Since its privatization in 1999, the company has been repeatedly loaded with debt and asset stripped by domestic and foreign speculators.[4] As a result, despite the company annually generating a profit, it is currently enacting wage cuts and redundancies.[5] As of July 2011, Eircom have total revenues of €360,000,000 in the bank.
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Eircom operates 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 MPLS platform. Eircom have also completed a wholly owned fibre network ring around Northern Ireland and another around Belfast. Their ISP division, Eircom Net, provides dial-up services, as well as broadband services (see broadband roll-out, below). Eircom Phonewatch provides burglar-alarm and home monitoring services. Any alarm-monitoring products using SMS are "hardcoded" to work with Eircom's SMSC, so will not work on Digiweb, BT, Smart, UPC or Magnet phone networks. DECT SMS handsets are also preprogrammed for Eircom's SMSC. Any competing phone service that is not just carrier pre-selection (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 cannot be reprogrammed.
Eircom's mobile arm, Meteor, provides a full range of HSPA/(3G) and 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. GPRS and EDGE data services are also available. Meteor have recently launched HSPA (3G Mobile Broadband) services in Dublin, Cork, Dundalk and Drogheda. Meteor provides both bill-pay (contract) and pre-pay (non-contract) plans and has approximately 19% of the Irish mobile market, with 1,032,000 cellular subscribers on the Meteor Network. The company has used EDGE technology on its network and has received a 3G (UMTS) licence, formerly removed from Eircom's competitor, Smart Telecom (This required 33% of the population to be covered by 3G by 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's PhoneWatch subsidiary provides monitored burglar alarms, fire alarms, CCTV systems, and medical alert devices.
The company was formed in 1984, as 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: Telecom Éireann.
From 2000 to 2008, Eircom sponsored the League of Ireland.
Due to EU laws requiring the opening up of the Irish telecommunications market; however, Ireland had a derogation from competition until 2003. Telecom Éireann was privatised, this was very controversial and subject to much debate. The process began in 1995, and by July 1999 the government had disposed of virtually all of its shareholding.[6] Eircom plc was then floated on the Irish Stock Exchange, London Stock Exchange, and New York Stock Exchange on 8 July 1999 and small/first-time investors were encouraged by the Irish Government to buy shares. The share price was set at €3.90. It later reached a high of €4.80, a 23% increase. Those initial investors who 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.
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.
In 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 in 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 Consortium headed by Tony O'Reilly, the chairman of Independent News and Media. Eventually in November 2001, the company agreed to 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 shares and 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).
On 19 March 2004, the 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 Wales rather 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.
In early 2005, several Irish newspapers reported that Meteor Mobile Communications, 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 2005, it was reported by The Irish Times that there had been three bidders for Meteor: Eircom, Smart Telecom, and a consortium led by Denis O'Brien. On 14 July 2005 RTÉ News reported on their business website that Denis O'Brien had withdrawn from bidding, and that it was understood that Eircom was the top bidder at €410 million. On 21 July, it was announced that Smart Telecom had also withdrawn, leaving Eircom as the sole bidder. Eircom announced the agreement to purchase it on 25 July 2005 at a cost of €420m.[7]
As of September 2008, Meteor (mobile) had over 1,000,000 customers and a market share of 30%, offering both GSM and 3G mobile telephony and broadband services.
As part of their mobile strategy, Eircom have also launched eMobile. This is to be complementary to the Meteor division (mainly used by residential wireless customers). eMobile is a mobile virtual network operator MVNO which uses the Meteor Network for its services to residential & business customers, to compliment the residential and business mobile services offered by Meteor.[8]
Eircom NI, is the name of the company's operations in Northern Ireland. With the division based in Belfast, Eircom own and operate a fibre-optic network ring around Belfast and Northern Ireland, linking into the national Eircom Network in the rest of Ireland. Eircom NI have won significant contracts thus far, the largest being the €100m "Network NI" contract for the Northern Ireland Civil Service, with other significant contracts as operator of choice for Northern Ireland Water and Viridian. The company in Northern Ireland currently provides services to local government and SME sectors.
On 2 November 2005, it was reported that the Swiss telecommunications company, Swisscom AG, had made an approach to Eircom regarding a possible takeover of the company. On 25 November 2005, the Swiss government announced that it would use its controlling stake in Swisscom to block any foreign takeovers, effectively ending hopes of a bid.
In May 2006 it was announced that Eircom was to be sold to the Australian investment group Babcock and Brown in 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 26 July 2006, and at close of business on 17 August 2006, the 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 September Rex Comb was officially named as the new CEO. Tony O'Reilly resigned as Chairman and was replaced by Pierre Danon, previously of BT Group plc and JP Morgan Chase. Babcock and Brown have since collapsed as a company and their BCM vehicle, which owns over 50% of Eircom, broke all ties with the former parent and rebranded themselves as Eircom Holdings Limited.[9]
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 Ireland and 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. Eircom 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 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. Unlike the UK, where BT's competitors now can 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.
After the privatisation of Eircom, the highly profitable mobile phone division, Eircell, was sold to Vodafone. Some[10] consider this act to be asset stripping by the large investors with interests in Eircom.[11]
Eircom announced in June 2007 that from 30 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.[12] Also announced was an increase of between 4.8 and 4.9% on local and national calls.[13]
In March 2011, Eircom pleaded guilty to a breach of the Data Protection Act, at the Dublin District Court.[14]
As of 2nd quarter 2006, 370,000 customers had broadband, 260,000 on DSL and the others on a mix of FWA, cable and satellite.[15] (Comreg, Q1 2006, Page 19).
On 1 November 2007, Eircom announced their 500,000th DSL customer.[16] In terms of speed and availability, Eircom exchanges can only deliver broadband to houses within 5 km (3.1 mi) in most of its exchanges and will not be investing in fibre optic or next-generation broadband, as stated in a meeting with members of Dáil Éireann in late 2008 about broadband availability. In 2011 Eircom announced that they would invest €100 million on high speed fibre optic lines which would be delivered as a pilot scheme to customers in Dublin and Wexford and the speeds will be 150mb/s.
On 21 April 2008 18:36, Eircom rejected claims by four major record companies that it, as the largest broadband internet service provider in the State, must bear some liability for the illegal free downloading of music by computer users. Eircom have thus far managed to come to an agreement with the companies involved, stating that they will be working in conjunction with these companies to prevent large amounts of copyrighted material being shared through the ISP. This in turn raises concerns over internet privacy, since presumably this will be done by monitoring the IP traffic associated with Eircom's customers. It is not known whether or not this bears any significance on the Meteor Mobile network, a mobile broadband supplier recently acquired by Eircom. Eircom has reportedly signed an out-of-court settlement with said companies and are initiating a program to clamp down on piracy, within their network, by instituting an IP monitoring service, accessible by the Irish Recorded Music Association (IRMA) and allowing up to three warnings before disconnection of service.
Currently, Eircom users who try to access The Pirate Bay receive the following message:
Since September 2009, The Pirate Bay website and trackers have remained blocked by eircom.[17]
Eircom agreed to a controversial deal with the IRMA (Irish equivalent of the RIAA) to activate a "three strikes system" so it will ban users from the internet for 12 months if they appear to be downloading copyrighted content through peer to peer filesharing networks.[18]
On 1 May 2009 Fintan Drury, chairman of the OneVision consortium (made up of the TV3 Group, Arqiva, Eircom and Setanta Sports), announced that OneVision is to enter negotiations with the BCI, with the view to take over operations of the Irish pay DTT service.[19] If negotiations are deemed successful, it may see the launch of DTT in late 2010/early 2011 at a proposed operation cost of €40 million. OneVision aspire to offer 23 channels coinciding with the free-to-air channels.[20] For further information on the subject, see: One Vision (DTT). Eircom is majority stakeholder in this project.
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