Eir is willing to sign a binding commitment to deliver high-speed fibre broadband to 300,000 homes and businesses at the centre of a year-long tug-of-war between it and the government.
Midway through last year, the company announced that it would provide broadband to an additional 300,000 rural homes and businesses.
This put it on a potential collision course with the government which had counted the premises among the 750,000 the National Broadband Plan (NBP) was to cover.
The government subsequently forged ahead with its initial plans, saying in December that no company had signed a commitment agreement providing assurances as to their ability to deliver on their commercial plans.
As such it couldn’t alter its own plans, the Department of Communications said.
The department added, however, that its plans could be scaled back at a later date to accommodate eir or another operator’s commercial plans.
Speaking to the Irish Examiner, Eir chief executive Richard Moat said the company was now willing to sign such an agreement.
The fact that it has begun the rollout and will have covered 100,000 of the 300,000 premises by the end of the year should reassure the government of its ability to deliver on its promise, he added.
Mr Moat said securing the contract for the National Broadband Plan — which will provide minimum download speeds of 30Mbps to the remainder of the 750,000 homes — is not financially critical for the company.
Eir’s financial performance has improved of late with four consecutive quarters of revenue growth but remains heavily indebted with net debt of €2.2bn.
Mr Moat said he was comfortable with the company’s debt level and added that it is “looking very seriously” at refinancing options that would save it €10m-€15m in interest payments per annum.
While winning the NBP contract is “not life or death” for the company, Mr Moat accepted it would make Eir more attractive to investors in a potential IPO.
“Yeah, that’s most definitely [the case] and I think even more importantly it is essential that it [the NBP] is decided one way or another before any consideration is given to an IPO, otherwise the first question investors would ask you is ‘What’s going to happen with the National Broadband Plan?’.
"So, if you know what’s going to happen it’s going to make it a lot easier to sell the story so that’s vital.”
An IPO remains the most likely exit for Eir’s shareholders at some point but finalisation of the NBP one way or another would not act as a “trigger” nor is an IPO likely to materialise anytime soon, he added.
The Eir chief did not rule out the possibility of a trade sale either.
Taoiseach Enda Kenny’s decision to grant responsibility for the provision of rural broadband to the newly enlarged Department of Regional Affairs, Rural Affairs, Arts, and the Gaeltacht has left Eir as unclear as many as to which department is ultimately in charge.
“I know no more than I’ve read in the papers but obviously it doesn’t seem to be firmly agreed that those civil servants [in the Department of Communications] are going to transfer across yet so we’ll have to see how it evolves.
"Obviously, this isn’t necessarily going to help whilst we’re resolving who’s actually got responsibility so the quicker that’s resolved the better obviously.”
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