Eircom receives Moody's ratings boost
Published 19/05/2011 | 05:00
EIRCOM got a rare boost from Moody's last night after the ratings agency said telecoms incumbents in Ireland and Greece had suffered less than competitors from the downturn.
The findings are from research into the effects of the sovereign debt crisis on the telecoms sector in the hardest hit euro economies.
However, it's a qualified vote of confidence and Moody's said small mobile phone operators have been hardest hit by the crisis, including Eircom-owned Meteor.
According to the research, falls in revenues and earnings have been steeper for mobile operators than for fixed-line operators. Moody's said that even though fixed line may be in long-term decline the mobile segment had been subject to greater volatility during the crisis.
By contrast Moody's said smaller operators were surviving the crisis better than the big players in Spain and Italy.
Moody's said Eircom's fixed line business had proved resilient during the crisis, not least because of the company's ability to implement cost cutting measures. However, the agency said Meteor had suffered significant pressure in the crisis because it was the number three player in the market.
According to Moody's, Eircom saw a 25pc fall in earnings in 2010. Greek mobile operator Wind Hellas suffered a 36pc fall in earnings and has had to write off the bulk of its multi-billion debt burden to survive the crisis. In Spain TeliaSonera suffered a 51pc drop in earnings in 2010, according to Moody's.
The Moody's review comes as Eircom faces into tough negotiations with lenders.