Eircom second-quarter revenues down 6%

1 Mar 2011

Irish former fixed monopoly Eircom today announced its results for the second quarter and half year ended 31 December 2010, reporting falling revenues as it continues to execute on its strategy of cost reduction and service improvements. In its release, the group also confirmed that in its view, ‘the economic environment is unlikely to improve in the near term and continued progress on cost reduction is necessary for competitiveness’. Eircom booked quarterly revenue of EUR438 million (USD604 million), down 6% from EUR465 million in the three months to 31 December 2009. Operational costs reduced 7% in the quarter to EUR284 million it said, but continued pressures in both fixed and mobile segments resulted in overall revenues falling and adjusted EBITDA declining 3% to EUR154 million in the quarter.

In the fixed line segment, Eircom said that revenues fell 6% for the quarter under review, although on a more positive note it said its cost reduction programme had resulted in an increase of EBITDA of 7%. In the DSL broadband segment, Eircom reported having 500,000 retail customers at the end of December 2010, while total DSL customers (retail and wholesale) stood at 683,000. In the last three months of the year Eircom extended the reach of its Next Generation Broadband (NGB) products which were available to 1.1 million customers at the year end. The group reports that there were 293,000 active NGB users as of 25 February 2011.

In the mobile sphere, Eircom said that following three quarters of negative customer growth, it gained 16,000 net new customers for both Meteor Mobile and eMobile in the period under review. Total mobile customers stood at 1,052,000 at 31 December 2010, although quarterly mobile revenues fell 7.5% year-on-year and monthly blended mobile ARPU dipped by 6% to EUR32.20, largely due to new lower priced plans, mobile termination rate reductions and changes to the traffic mix.

Commenting on the results, Paul Donovan, CEO of Eircom Group, said: ‘The Group continues to face challenging trading conditions due to the impact of the economic environment and changes in disposable incomes. Revenue losses have been partially offset by operational cost reductions, but it is vital that Eircom remains single-mindedly focused on its three year transformation programme to reshape its cost base, to modernise and to generate new streams of growth. Today’s announcements underline that we are taking important steps towards securing the future of the group and offering greater value to our customers with innovative products. However, we still face enormous challenges if we are to be competitive in the long term.’

Ireland, eir