eircom puts reorganisation, sell-off plans on back-burner

21 Apr 2008

Irish incumbent eircom has shelved any immediate plans to separate its retail and wholesale operations and sell off mobile arm Meteor Mobile, citing the unstable global credit markets, economic uncertainty and a lack of transparency in the regulatory framework as the main reasons. A report in the Sunday Business Post suggests that as a result of the changing economic environment, the former monopoly does not see the separation plan being resurrected ‘for at least two to three years’. Last year eircom put forward its proposal to the regulator ComReg to set up a new unit to handle the company’s network business, and then sell off its retail and mobile (Meteor) businesses as part of what was called a ‘structural separation’. It recently hired consultants to explore the proposal and earlier this month the incumbent submitted a new plan to the government under which it promised to up its investment in providing improved broadband coverage in return for tax incentives for upgrading exchanges where converting to fibre would not normally be commercially viable.

Irish 3G only operator 3 Ireland has reacted strongly to eircom’s new proposal, however, describing its offer to increase broadband investment if the state pays part of the EUR500 million bill as ‘blackmail’. 3 accuses the former monopoly of effectively giving the government an ultimatum that, unless it supports the incumbent’s plans, then it will not deploy high speed broadband on a national basis. 3 Ireland has declined to say whether it would pursue any favourable decision towards eircom through the courts.

Ireland, eir, Hutchison 3G Ireland (Three Ireland)