Eircom to undergo overhaul

A “new Eircom” is about to emerge, according to the company’s chief executive who said he is “very confident” the firm will put this period of financial instability behind it and get on a solid footing.

Paul Donovan said operationally the company is getting itself in better shape and is planning to invest €1.3 billion in the next three years.

Mr Donovan said that shareholders are talking to bondholders about reducing the debt burden and injecting additional funds into the company.

He also said Eircom’s pension fund is now close to break-even as the company froze contributions and placed caps.

Mr Donovan, who was speaking at the Irish Examiner Cork Chamber breakfast briefing yesterday, said Eircom’s pension fund is one of the few large defined benefit schemes which is close to break-even. Back in 2009 it has a deficit of around half a billion euro.

Meanwhile, Mr Donovan said it is important to recognise that the privatisation raised almost IRL£6 billion for the exchequer, adding that practically “every cent” in the National Pensions Reserve Fund derives from that time.

He said that since its privatisation, the company was subject to many “twists and turns”.

He said Eircom is a company which is very important to the country.

“It’s important for Ireland’s economic recovery that we have a first-class telecommunications infrastructure” he said.

Mr Donovan said the objectives of the country and of Eircom need to converge rather than diverge like they have in recent years.

He said that when he took the role of chief executive in 2009, the company didn’t have a strategy or a long-term plan and it was “incredibly uncompetitive” when it came to costs.