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eircom to accept 3G licence; posts Q3 and nine-months results to 31 December

28 Feb 2007

Irish incumbent eircom says it will accept the final 3G licence being offered by the regulator ComReg. The concession is the one taken back from troubled alternative operator Smart Telecom last year. The telco went into meltdown in October 2006, not long after eircom took the decision to cut off 40,000 or so Smart telephone customers in a EUR4 million payment dispute. At the time eircom allegedly declined a request from ComReg that it give Smart customers a suitable period of notice before initiating its plan to formally disconnect its wholesale service with the troubled operator, and announced it would terminate the service by 5pm the same day. eircom is understood to be putting the final touches to a business plan that would give its mobile arm Meteor Mobile nationwide access to high speed mobile services via network sharing deals with rival operators. Meteor ended the year with 803,000 subscribers, up from 625,000 at 31 March 2006 and 565,000 in December, with almost 70,000 signing up in the last three months of the year. By the end of last month the mobile total had climbed again to 818,000.

eircom’s announcement coincides with the release of its latest financials covering the quarter and nine months to 31 December 2006. Revenue for the quarter was EUR490 million (USD647 million), up 9% on the corresponding period of 2005, while underlying earnings (EBITDA) rose 8% to EUR154 million; Meteor contributed EBITDA of EUR14 million. Fixed line turnover was EUR409 million, up one percentage point on the same period a year ago. eircom said its fixed line unit had 2.379 million access channels in operation at the end of 2006, up from 2.187 million a year earlier. The company also reported signing up 60,000 DSL broadband users in the fourth quarter to lift its total for the year to 360,000. By 15 February 2007 this figure had climbed again to 390,000.

Group revenue for the nine months to 31 December was EUR1.467 billion, up 11% on the same period of 2005, with fixed line services generating the lion’s share, or EUR1.242 billion, of the total. EBITDA was EUR446 million, up from EUR440 million previously. The EBITDA margin was unchanged at 36%. Group operating profit dipped by 9% year-on-year to EUR214 million, largely the result of lower property disposal gains in the current period. CAPEX was EUR219 million in the nine-month period, compared to EUR171 million previously, with a strategic focus on increasing capacity, demand led growth, DSL rollout and investments relating to Meteor.

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