Eircom's winding road

BY ROBBIE SMYTH

Eircom, the former publicly owned state telecommunications company, returned to profitability in the 12 months to the end of March 2005. It recorded profits of €52 million after a loss of €89 million the previous year, even though company sales fell 2% to €1.6 billion. Operating profits were €236 million, restructuring costs took €18 million.

Eircom cut 668 staff over the year, this cost €72 million and it now has 7,275 workers and also faces mounting pension charges. Despite the return to profits, the company has other problems, including the fact that 25% of the population now use mobiles only and have given up their landlines.

Eircom used to own a mobile company but sold it Vodafone. Eircom's solution now is to buy the Meteor franchise at the asking price of €400 million.

So the company has come full circle; it was a fully listed stock exchange company with a fixed line and mobile network service. It sold the mobile network and went off the stock exchange, only to be floated again last year, and now it wants to buy another mobile phone company. Haven't we been here before? Perhaps the next step is to take the company back into public ownership!