Eircom’s fixed-line telephone business continues to lose revenue
Overall revenues for the first quarter of its financial year to the end of June were down by €3 million to €399m. However, revenues from phone call traffic were down 8% on the same period last year at €196m.
The number of retail traffic minutes the amount of time spent on phone network was down from 3.07 billion minutes a year ago to 2.71 billion at the of June. The fall is believed to be from consumers using their mobile phones more often.
Earnings before interest, tax, depreciation and amortisation of goodwill were down by €6m to €150m.
Eircom's profits will be boosted by an €45m gain on the sale of land, however.
The figures also reveal that 150,000 people have signed up to Eircom's broadband packages, up from 54,000 last year, but an increase of only 10,000 since the beginning of April, indicating a slowdown in broadband take-up. Eircom had targeted having 500,000 broadband customers signed up by 2008.
However, the company's chairman Tony O'Reilly denied that price was hindering the speed of broadband penetration. He said dial-up access was still the preferred connection of the majority of internet users, who spent less than 10 a month on access. "We'll try and sell it to them, but they will not take it up," he said, adding that broadband prices in Ireland were close to the European average.
Eircom said increasing PC and internet penetration was required for broadband take-up to continue rising.
Dr O'Reilly also said yesterday that he would continue to serve as chairman despite weekend speculation that he was preparing to step down.
"I am here and I am chairman. If you look at our prospectus that was issued last year, it said I was appointed for three years and that is an appropriate comment at this stage."
Shares in Eircom slipped almost 7% on the Dublin market yesterday to €1.73 on news of the rights issue to fund its takeover of Meteor.
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