Rising consumer debt threatens Irish telcos

Rising levels of consumer debt in the Irish telecoms sector pose a long-term threat to start-ups and would-be market entrants wishing to enter the telecoms market, writes online news portal SiliconRepublic.com, citing a report from Intrum Justitia, the finance company that handles the debts of 95% of Ireland’s telecoms operators. According to the Nordic credit management firm’s report, consumer debt in the sector has been the fastest growing of any sector of the industry for the past decade. Intrum Justitia, which includes Vodafone Ireland, O2 Ireland, Meteor Mobile and Smart Telecom among its list of clients, has reportedly entered into a joint venture with Goldman Sachs to invest in portfolios of debt worth EUR200 million (USD259.7 million) from Irish businesses over the next year. In 2006 alone the Nordic firm received a quarter of a million new instructions from Irish telcos – equating to 5% of the Irish population – with the average size of consumer debt per person said to be around EUR300. Intrum Justitia expects this figure to rise, presenting an obstacle to any companies wishing to enter the market.