Eircom revenues fall 3% year-on-year

Eircom yesterday reported reduced revenues of €313m for the first quarter of the financial year — a 3% year-on-year decrease.

The company attributed the fall to reductions in its fixed line business, which eroded gains made in the mobile market.

Earnings also suffered in the three months to the end of September, with EBITDA down 6% due to planned investment in subscriber growth, the company said, adding that the figure was in line with expectations.

Commenting on yesterday’s announcement, eircom chief executive, Richard Moat said: “We have maintained our momentum in the first quarter through focused commercial execution and continued investment in our fixed and mobile network. The rate of revenue decline has slowed significantly — an encouraging sign of stabilisation — helped by two consecutive quarters of mobile revenue growth. Our bottom line performance remains in line with expectations, following a decision to make commercial investments this quarter that will deliver long-term growth.”

Mr Moat added that further cost reductions are resulting in continued improvements in the company’s financial performance, but added that significant challenges to implementing its commercial strategy remained in a highly competitive Irish market.

The company’s operating costs fell 2% to €199m in the three-month period, representing a €7m or 6% decrease compared to the same period last year.

Fixed line revenues fell 4% to €238m compared to the corresponding quarter as connections dropped 7,000 year-on-year in the quarter.

Eircom’s broadband customer base continued to increase, with 13,000 new customers bringing its total reach to 731,000. Of those, 172,000 are connected to the faster fibre broadband network with a sign-up rate of 17% of the 1m premises in areas where construction of the fibre network has been completed but where service may not be available yet.

“Our next generation fibre network has passed the 1m premises milestone during the quarter, and we are on course to deliver a fibre footprint of 1,600,000 premises by June 2016, capable of supporting broadband speeds of up to 100Mb per second.”

The company also said that it would proceed with the restructuring plan outlined earlier this year.

In September, eircom abandonded plans for a third stock market flotation after lack of support from its shareholders. The IPO had been expected to raise approximately €1bn which it was anticipated would be used to pay off its net debt burden.