1 December 2005 Edition

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Economy in briefs

Leading economist backs all-Ireland economy

A leading economist in the North has supported the development of an all-Ireland economy.

Stephen Kingon, a member of the board of Invest NI, made the comments at a meeting of the British-Irish Inter-Parliamentary Body in Edinburgh.

He said increased co-operation between the Six and 26 Counties would be of benefit to both economies.

Eircom rudderless after stalled Swiss sale

Eircom, the former state-owned phone company can't stay out of the news. This week the stalled sale of the firm to the Swiss state-controlled phone company highlighted the lack of a long term strategy at the Irish company.

In recent weeks Eircom's acquisition of the Meteor mobile franchise, increased profits and growing broadband penetration all pointed to a company leaving behind the confusion of recent years, when it was privatised on the stock market, sold on and then floated once more as a public company.

Then there was the sale of Eircom's Eircell mobile network to Vodafone followed by an about turn this year with the purchase of Meteor.

However, media leaks in October revealed that Eircom had been in talks with two potential buyers. The interest from Swisscom ramped up the Eircom share prices only for a 16% fall late last week when the Swiss Government, who own 66% of Swisscom blocked that company's purchase of Eircom and the Danish mobile phone firm TDC.

Eircom like Swisscom is operating in a market of shrinking fixed line customers and needs to develop new markets. The future strategy of Eircom is once again unclear.

Not high on their or the government's agenda is the need to strategically develop Ireland's telecommunications infrastructure. Profits might be up but broadband penetration in the 26 Counties is seriously behind other EU states.

A Chambers of Commerce of Ireland study this week found that less than one third of Irish businesses have broadband Internet access. More damningly they found that 30% of businesses are unable to upgrade their systems because of a lack of service availability.

It seems that the game of passing the parcel by buying Eircom, asset stripping, selling and buying again while make substantial profits without investing them back into the telecommunications network is set to continue.

An Phoblacht
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