EAMON QUINN: Eir hails momentum but State broadband plan may slip further

The schedule for the start of the Government-subsidised National Broadband Plan may slip further, as complex talks between operators and the Department of Communications about the nature of the tenders continues, the Eir chief executive has said.

In a briefing on its first-quarter results, Richard Moat said the telecom was on course to deliver earnings growth this year and meet its pledges on investment in broadband and mobile, after posting the sixth quarterly increase in earnings.

The results marked definitive proof that Eir, which only exited an examinership in 2012, was growing earnings, he said.

Its own investment in rural broadband, which aims to reach 300,000 homes and businesses in small towns and villages by the end of 2018, will reach a key milestone this year.

However, complex negotiations will likely mean contracts for the Government-sponsored National Broadband Plan are not awarded by the middle of next year.

Mr Moat said Eir was seeking to win as many as possible of the contracts, but negotiations with the Department of Communications meant the deadline of mid-2017 was “looking a little optimistic”.

“It remains to be seen when the process can be completed, but we are heavily committed,” he said.

Revenue in the three months to the end of September, the company’s fiscal first quarter, rose 1% to €327m from a year earlier.

Fixed-line revenues totalled €249m. Earnings before interest tax, depreciation and amortisation were also up 1%, to €122m. Having spent about €1.4bn in the last four years, Eir said it plans to earmark up to 20% of revenues for capital expenditure.

“The message from these results is that we are maintaining momentum. This is our sixth successive quarterly earnings growth,” Mr Moat said.

The Eir Sport channel, which was re-branded from the old Setanta this year, is in talks with Croke Park about potentially extending its GAA coverage.

Mr Moat said the planned change in ownership of Eir, as US hedge fund Anchorage Capital secures a majority of the voting shares following the sale by an existing stakeholder, will not hasten an IPO.

He said Anchorage was an investor for the long-term. “They have been in the owner structure since 2012. They have been heavily involved in the business throughout. They are long- term holders.

"They see potential for further growth and in terms of an IPO that is still at least a couple of years away and they, and we, are focused on the growth of the business,” he said.

Eir reiterated that it would talk to its credit-rating firms next year after slashing finance costs on its bonds and loans this year. It has €700m in bond debt, €1.6bn in loans, as well as other “flexible” credit facilities.


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