Smart losses widen on broadband investment

19 Jun 2006

Irish alternative operator Smart Telecoms reported widening annual losses of EUR23.1 million for 2005, up from EUR10.6 million previously, as it invested heavily in rolling out its broadband network and increasing its residential voice/internet user base. In addition, the company incurred significant costs related to its bid for a 3G mobile phone licence. On a more positive note, revenues nearly doubled to EUR45.6 million in the twelve months to 31 December on the back of strong subscriber gains in the internet access market, while Smart CEO Oisin Fanning said 2005 had been a year in which his company was transformed from a reseller into a service provider capable of delivering its own voice, data and broadband services.

Smart says it hopes to sign up 40,000 customers to its broadband service by the end of the year and also plans to enter the mobile market pending a High Court challenge against the telecom regulator ComReg. However, the CEO’s confidence fails to mask the fact that his company is struggling to compete with former monopoly eircom. Smart currently has 65,000 residential customers, down from 70,000 in February 2005, and the number of people using its fixed line-only service has plummeted from 70,000 to 50,000 in the face of aggressive marketing from the incumbent. Meanwhile Smart’s broadband service, launched in February 2005, has failed to fully offset the decline and has only attracted 15,000 subscribers, well short of the figure it hopes to reach in six months time.