Ryan told Eircom owner STT to boost infrastructure
Communications minister Eamon Ryan told the chief executive of Singapore Technologies Telemedia (STT), the majority owner of Eircom, that industry players would have to "give up something good in order to get something better" so that Ireland's telecoms infrastructure could be further developed.
In a meeting held last year between Mr Ryan and Mr Lee Theng Kiat, minutes of which have been seen by the Irish Independent, just as the STT acquisition of Eircom was being finalised, the minister told the STT boss that there was a need for collaborative approaches between industry, the government and the regulator.
Mr Lee told Mr Ryan that Eircom, which is labouring under a massive €3.3bn debt pile and has been restructuring its business since last year, presented a "complex set of issues" that STT believed could be tackled. At a later meeting, Mr Ryan was told that the "balance sheet" challenge was the key short-term issue for Eircom.
Mr Ryan said at last September's meeting that there was a "deal space" into which all parties must enter to make "real progress" regarding telecoms infrastructure development.
Mr Lee told Mr Ryan that STT would be using its experience as a competitive operator and that he hoped the company would repeat that success with Eircom, with bundling of products representing a lynchpin of STT's strategy for the Irish telco.
In a follow-up letter from Mr Lee to Mr Ryan in October last year, which included a profile of Eircom's massive debt pile, the STT chief executive said that he was convinced that STT's approach "will enable Eircom to play an important role in building Ireland's smart economy, especially through contributions to the next generation broadband network".
Eircom chief executive Paul Donovan told representatives of Mr Ryan's department last October that STT would be taking a long-term perspective, which would be crucial over the next three to four years during which time the industry expects major transformations.
Mr Donovan told the department officials, including secretary general Aidan Dunning and head of public policy Pat Galvin, that he was impressed by STT's "calm, considered, no-nonsense and business-like" approach. He stressed that Eircom had reached a "watershed" juncture caused by various circumstances including the STT deal and the need for a next generation network in Ireland.
He added that he believed a constructive, holistic approach by telecoms watchdog Comreg would be a better approach for industry players and that he was prepared to change Eircom. He said he wanted to reduce Eircom's wholesale and retail prices and find innovative, open, co-operative models for investment.