BT warns of future broadband troubles

BT IRELAND delivered strong half-year results yesterday but warned that Ireland’s broadband failures were storing up long-term headaches for the economy.

Revenues at the former Esat BT surged 27% to €220 million for the six months to September as the local arm of the global telecoms giant snapped up wholesale and corporate business.

Earnings before interest, tax, depreciation and amortisation - the key benchmark in the telecoms industry - were in line with expectations at €12m, but the company did not disclose its losses at the pre-tax level.

New BT Ireland chief executive Danny McLaughlin said market conditions were challenging but BT’s business was solid and focused.

The wholesale business was the star performer, growing revenues by 43% to €100m, but there was good news across the board with corporate, small and medium enterprise and consumer revenues all being bumped up by at least 10%.

BT now counts 18 of the Irish Stock Exchange’s top 20 companies among its clients.

But it warned broadband take-up was slowing to a halt and reiterated calls for government intervention to set the lacklustre high-speed internet market on fire with new laws to facilitate greater competition with Eircom.

“We have seen tremendous growth in the business segment, which is an area of the market that truly open to competition,” said Mr McLaughlin.

“Unfortunately, consumers have yet to enjoy the benefits that increased choice and competition can bring. We’re pleased therefore that the Government has recognised that legislation may be needed to eliminate the broadband bottleneck and the detrimental impact that this is having on Ireland.”

Mr McLaughlin said Ireland was recently overtaken by Romania in the European league table for broadband access and compared unfavourably with locations such as the North and Wales, where broadband availability was close to 100% and put them in a better position to attract inward investment. BT estimated the Republic’s figure at around 65%.

BT wants the telecoms regulator to be given more power to force changes in the market and make it easier for Eircom’s rivals to make products available to a wide base of customers.

Chief operating officer Mike Maloney said BT had cut its broadband prices as aggressively as possible to stimulate demand but that the current regime meant it could only offer the same products as Eircom and had limited room to manoeuvre on price.