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Eir plans €1bn network boost as billionaire takes control


New Eir owner Xavier Niel   Photo: Bloomberg

New Eir owner Xavier Niel Photo: Bloomberg

New Eir owner Xavier Niel Photo: Bloomberg

Eir is preparing an investment plan of €1bn into its network over the next five years, senior executives have told investors.

The company's new owner, Xavier Niel, is said to be drawing up plans to invest in more fibre for Eir's ageing network as well as considerable new investment into mobile infrastructure.

The signals will come as a relief to government ministers, anxious about the French billionaire's plans for the telecoms company, a 65pc stake of which he acquired through two companies, NJJ and Iliad.

Eir has built out 200,000 fibre-to-the-home broadband connections in large regional towns, according to its most recent financial results.

However, it has previously not give any indication that it would proceed with future fibre-to-the-home investments once its target of 300,000 premises was reached.

In particular, it has not given any guidance on what it intends to do in urban areas, where it has almost no high speed fibre-to-the-home broadband services.

At present, Virgin is the only high speed broadband service at scale in Irish cities, with rival services unable to exceed 100 megabits per second as they are based on Eir's legacy copper telephone lines.

Eir has 919,000 broadband customers, 300,000 of whom are stuck on slower landline speeds of under 30Mbs, making them eligible for state-sponsored fibre connections under the Government's upcoming National Broadband Plan.

While Eir said yesterday that its broadband connections grew 3pc to 919,000 in the three months to the end of March, all that growth was achieved via Eir's wholesale arm, rather than through its own retail customer base. It had 444,000 retail broadband customers at the end of March.

The group's broadband revenue for the latest quarter fell 2pc to €42m.

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"Revenue gains in wholesale were offset by increased promotional offerings in the consumer division," it said.

The company added: "We continue to address retail fixed line losses and broadband churn with a number of programmes, including rolling out high speed broadband and offering bundled telecommunications services including broadband, TV, mobile, telephony and Eir sport content."

At the end of March, 75,000 Eir customers were availing of its TV service, 8,000 more than a year earlier. The company also has just over one million mobile subscribers.

Eir's new chief financial officer, Stephen Tighe, said the group will improve its key performance indicators "through continued network investment, while becoming a super-efficient operator with a major focus on cash generation".

Cost efficiencies helped to boost Eir's earnings before interest, tax, depreciation and amortisation by 4pc to €137m in the three months to the end of March as the telco prepared for its latest change in ownership.

But revenue at the group slipped 1pc in the quarter to €317m amid stiff competition.

Eir, whose chief executive is Carolan Lennon, said that growth in mobile, bundling and TV revenue was offset by a reduction in low margin Eir business revenue, and a decrease in retail voice traffic.

Last month, just after the change of control at Eir was finalised, the company launched a voluntary redundancy scheme.

That's set to see its workforce cut by 750 by the summer, and could cost the telco over €100m.

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