Eircom announces fall in profits

Fixed line operator, eircom has been hit hard by charges it had to take as a result of restructuring moves and the sale of its mobile unit, Eircell to Vodafone.

The group's turnover plunged significantly from €2.2bn to €1.8bn, an 18% drop year/year.

Pre-tax loss for the period was set at €52m, compared to a profit of €60m last year.

Eircom took a charge of over €70m for the period as a result of write down in the value of its assets as well as the closure of some of its international offices.

While the group's retail business was hit particularly hard, its 11811 directory assistance service reported a significant improvement in its results from last year, clocking up a profit of €0.13m, compared to a loss of €4m one year earlier.

Sources close to the company say that it is been badly affected by the price cap enforced on it by the ODTR.

However, last month, ALTO, The Association of New Entrant Operators in the Irish telecoms market called for a review of the current price cap, saying it hinders investment for new operators wishing to enter the market and asking the cap to be maintained until it an alternative had been presented.

ALTO suggests suggesting instead, wholesale and retail price controls and squeeze tests similar to those employed in the UK and the Netherlands