Eircom agrees long-term network sharing deal with Three Ireland

Eircom agreed a key network sharing deal with Three Ireland that will see the two operators share existing mobile infrastructure and split the cost of deploying new cell sites through 2030.

Eircom CEO Herb Hribar

The agreement fulfils a European Commission requirement for Three Ireland to offer Eircom an improved network sharing deal in return for the Commission clearing its acquisition of domestic rival O2 Ireland in May.

Eircom and Three Ireland agreed to share site equipment, power supplies, and towers and transmission equipment throughout Ireland. Existing cell sites owned individually will be consolidated into the new network, and the companies will jointly fund deployment of new sites as they work towards a shared network comprising at least 2,000 sites.

Richard Moat, Eircom's CFO, said the length of the agreement "provides certainty for both parties and the benefits of network sharing will become more evident in the coming three years."

Current infrastructure sharing agreements have already "delivered new and innovative services to the Irish market," Moat noted.

Three Ireland's CTO, David Hennessy, said the deal will boost service quality while enabling the company to reduce its costs.

Eircom stated the deal will also boost availability of LTE services, and bring data services to all parts of Ireland. Three Ireland previously detailed plans to invest €300 million ($395 million) in the construction of an LTE network in the country over the next three years.

Irish regulator ComReg and rival mobile operator Vodafone criticised the EC's decision to clear Three Ireland's acquisition of O2 Ireland. The regulator said network sharing agreements would not be enough to protect consumer choice. Vodafone said it was considering a legal challenge to the merger decision.

Eircom and Three Ireland noted that the network sharing deal does not cover the transfer of spectrum or other assets, and that they will continue to compete with each other in the open market.

The incumbent operator's mobile business generated earnings before interest depreciation and amortisation (EBITDA) of €36 million in the year to end-June despite a 2 per cent decline in revenue, Eircom revealed in its annual results on Thursday.

Mobile subscriber numbers held steady at 1.05 million and the company increased the proportion of post-pay users from 33 per cent in the year to end-June 2013 to 40 per cent in the recent 12 months. Eircom states 65,000 subscribers are LTE customers.

Eircom Group's CEO, Herb Hribar, noted the company as a whole has "now had eight consecutive quarters of EBITDA stability, slowing decline in our revenues, and an improved cost base."

Group EBITDA fell a marginal 1 per cent year-on-year to €479 million in the year to end-June 2014, excluding storm damage repair costs.

For more:
- see Eircom's network sharing announcement
- view the operator's earnings release

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