Eircom ‘could net €130m a year from broadband plans’

EIRCOM’S €500 million capital investment in broadband over the next five years could deliver revenues of €130m a year if the company reaches its target of 85% coverage by 2005.

Davy Stockbrokers, in a 105-page report initiating their coverage of the Irish Stock Exchanges' latest recruit, indicates that Eircom's broadband rollout is a key element for future growth.

The report by analyst Jack Gorman estimates that Eircom will invest €1bn over the next five years on capex investment with just half of this going to broadband. The report also reveals that Eircom estimates that 28% of its telephone lines are substandard. Mr Gorman believes the fixed-line market can generate modest, low-single-digit growth, but said this will be heavily influenced by the success of the broadband rollout.