Tuesday 25 July 2017

'Very unlikely' Eir's wholesale and retail divisions will split, insists boss

Carolan Lennon of Open Eir
Carolan Lennon of Open Eir
John Mulligan

John Mulligan

Separating Eir's wholesale arm from its retail division would be "very unlikely" and the economic case for such a split does not exist, the managing director of the unit has claimed.

Carolan Lennon, who heads Open Eir, insisted if the telecoms regulator Comreg forced a functional separation of the wholesale business from Eir's retail group, it would drive up costs at the wholesale division, which had annual revenue last year of €338m.

"Do we want to spend €50m separating our IT systems, or spend €50m getting to 400,000 homes (under Eir's current fibre roll-out plan)?" said Ms Lennon.

Comreg appointed consultants earlier this year to examine Eir's dominant position in the wholesale market.

One possible outcome of the review would be a recommendation that Open Eir should be functionally split from the retail arm.

Some rivals would be keen for such a move to happen. BT Ireland has pointed out in the past that BT's wholesale unit in the UK is also functionally split from the retail division.

BT Ireland and other operators are regular critics of Eir, claiming it favours its own retail customers over its wholesale customers, which include BT Ireland and others such as Vodafone.

"I'm very confident we treat everybody equivalently," said Ms Lennon in an interview with the Irish Independent.

She said that in the countries where decisions have been made to functionally split wholesale divisions from telcos, it has happened where the telcos also had significant retail market shares.

"My retail colleagues compete with Vodafone, Sky, and Virgin, and Eir has about a 30pc market share," she said.

"The decisions for functional splits are made on economics. If you look at the economics [of Eir], it doesn't seem to be there to make that case."

"Obviously, any push in that direction just drives loads of cost.

"You've got to have separate IT systems and all that sorts of stuff. There has to be an economic argument for this," she added.

Ms Lennon also said that even if Open Eir has functionally split from the group, it would still be likely to draw criticism.

"Would it all go away? I think there would be another hurdle to get over," she said.

Read the interview:

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