Eircom earnings down €17m

Eircom has reported a €17m drop in earnings to €440m in its third quarter results.

The fall-off in earnings before interest, taxes, depreciation, and amortization (EBITDA) was due to two factors, eircom chief executive Philip Nolan said today.

"Firstly, in common with other incumbents, eircom faces margin contraction due to increasing competition," he said. Eircom lost abut 30,000 customers to competitors in the period.

"Secondly, we are investing to drive increased DSL and line penetration to grow future revenue."

He added that eircom's DSL strategy had yielded a customer base of 215,000 on February 9.

Eircom's third-quarter results include contributions from Meteor for the first time. Eircom completed the acquisition of Meteor from previous owner Western Wireless on November 23 last year.

Today's results include Meteor results for one month and show that total subscribers to the mobile service were 565,000 on December 31, up 66% year-on-year.

The rights issue to fund the acquisition of Meteor was completed on October 7 with 313,349,862 ordinary shares being issued at a share price of €1.35 per share.

Eircom today estimated Meteor’s market share by subscriber at close to 14% and has set a target of 20% for its new mobile arm. Post-paid subscribers make up 6% of the base and accounted for about 12% of the net adds in the last quarter.

Eircom group revenue was up €27m to €1.2bn for the nine months, due largely to the addition of Meteor revenues.

Philip Nolan said today: "…These results demonstrate solid progress towards our strategic goals of defending our fixed line base, growing broadband and re-entering the mobile market."