Smart Telecom raises £10 million

SHARES in Smart Telecom, the country’s third largest phone company, got off to a good start on their first day of trading on the London Stock Exchange.

Smart shares floated at 15p, raising £10 million (€14.6m) for the company, but gained as much as 30% by mid-afternoon. They ended the day at 18p.

The company said it will use the money raised to fund its expansion into the broadband internet market.

Smart, founded by Oisin Fanning, the former boss of the collapsed stockbroker MMI, says the company has over 45,000 customers in the residential phone market and is rapidly expanding into the business market by offering broadband internet services.

The company was set up by Mr Fanning four years ago and is based in Citywest in Dublin. It employs around 150 people and has grown through several acquisitions in recent years. Aside from fixed-line phone and internet, it also operates 2,500 payphones and runs a call card business.

The expansion has seen the company make a loss in the past three years, however its turnover has more than doubled.

According to annual results released in June Smart Telecom made a pre-tax loss of €8.2 million on revenues of €12.6m

Smart said yesterday that it was confident of taking on eircom in the competition stakes. It also believes that the investment by the government in internet networks will boost competition and give other operators a better chance of taking on eircom in the broadband market. Smart Telecom said broadband take up is just 2%, which leaves plenty of room for future growth.

“The directors believe there is a widespread perception in Ireland that current prices for telecommunications services in the Irish market (primarily supplied by eircom) are excessive in both the residential and corporate market sectors,” Smart Telecom aid yesterday.

“In Ireland, take up of broadband lags significantly behind many other European countries.”