eircom restructuring offer has strings attached

6 Aug 2007

Ireland’s former monopoly operator eircom is understood to be willing to suggest a radical restructuring of its domestic fixed line business and a commitment to build out a fibre-optic network, in return for assurances from ComReg that it will enjoy a favourable regulatory regime over the next five years. The Irish Sunday Business Post writes that the incumbent is planning to hive off its network into a standalone entity, sell off its retail and mobile divisions, build a fibre-optic network covering 80% of the population and give the government a share in the network, while also assuming responsibility for the state’s loss-making EUR150 million rival metropolitan area network (MAN) infrastructure. It believes the overhaul will improve competition by freeing up access to all its networks, while simultaneously providing an environment beneficial for its Ozzie owner, Babcock & Brown, to get a return on its investment. In return, the Australian-owned group will seek assurances from ComReg and the government that it will be given a clear regulatory regime on the prices it can charge for the use of its network. It is currently allowed to make an 11% return on its assets but will seek an increase in this figure (guaranteed for five years) as part of any deal.

Separately, eircom has announced the upgrade of a further 19 local exchanges with broadband capability in the Republic, under its national broadband rollout programme, bringing high speed internet access to a potential 12,000 new customers.

Ireland, eir