Eircom mobile earnings grow, but churn challenge remains

Eircom admitted it has work to do to cut churn at its mobile business, despite increasing earnings before interest, depreciation and amortisation (EBITDA) at the division in the nine months to end-March.

Eircom CEO, Herb Hribar

The Irish incumbent's mobile businesses' EBITDA grew by €14 million ($19 million) year on year to €23 million in the nine months to end March, despite a marginal 1 per cent fall in revenue compared to the same period in 2013. Eircom noted it grew contract customers by 6,000 to 1.07 million in the year to end-March, and said these higher value subscribers accounted for 39 per cent of its overall mobile user base, compared to 31 per cent at the same point in 2013.

However, the operator also said it faces challenges "in relation to churn" after it lost 19,000 pre-pay customers in the opening three months of 2014.

"Mobile revenue is stabilising and the profitability of the mobile business continues to improve, increasing by €4 million compared to the prior year quarter," Eircom CFO, Richard Moat, said.

Moat noted the quality of Eircom's mobile subscriber base is increasing, referring to the shift towards post-pay users. The operator also said its LTE rollout is ahead of schedule, and now covers 50 per cent of the Irish population.

While Eircom is confident its mobile business is moving in the right direction, total company EBITDA fell 4 per cent year on year to €342 million in the nine month period, and 8 per cent year on year to €109 million in the three months to end March.

Herb Hribar, Eircom CEO, noted the company was hit by one-off network repair costs of €10 million in the opening three months of 2014 that "reduced our reported EBITDA during the quarter." However, the chief executive said that the results show "stabilisation in our underlying bottom line and progress on cost reduction."

For more:
- see Eircom's results announcement

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