Eircom's mobile business puts brakes on group revenue decline

Eircom CEO Richard Moat said a second consecutive quarter of growth in mobile revenues helped slow the rate of overall revenue decline at the Irish incumbent in its fiscal first quarter, which covers the three months to end-September.

Mobile revenue grew 2 per cent year-on-year in part due to strong growth in post-pay subscriber numbers, which increased 16 per cent year-on-year. Net additions totalled 14,000 during the quarter, taking Eircom's mobile user base to 1.06 million at end-September. However, the mobile division's earnings before interest, depreciation and amortisation (EBITDA) remained broadly in line with the same period of 2013, at €8 million ($9.9 million).

Eircom said it had signed up 91,000 4G subscribers by end-September, and that 17 per cent of its subscribers are signing up to its triple- and quad-play bundles. Moat said the company is unchallenged as a provider of quad-play services, and hinted at further growth in 4G subscriptions after a recent launch of pre-pay services.

"We have maintained our momentum in the first quarter, through focused commercial execution and continued investment in our fixed and mobile network," Moat said, adding: "Our bottom-line performance remains in line with expectations, following a decision to make commercial investments this quarter that will deliver long-term growth."

The operator's overall EBITDA took a hit due to planned investment in subscriber growth, however, falling 6 per cent year-on-year to €114 million. Moat said the figure is "in line with expectations," but conceded "there are challenges as we execute on our commercial strategy," in a market that "remains highly competitive."

A cost cutting programme--described by Moat as "cost transformation"--delivered a €3 million year-on-year reduction in operating costs in the fiscal first quarter, to €199 million. Moat said there are opportunities for further reductions in costs, and explained the company has "recently commissioned a benchmarking exercise to identify areas where further savings can be realised."

Moat said Eircom's fibre network hit the milestone of passing a million premises during the quarter, leaving the company on track to pass 1.6 million premises by June 2016 with a network capable of providing data rates up to 100 Mbps. "We also recently announced plans to bring 1 gigabit connectivity to 66 towns across Ireland using fibre to the home (FTTH) technology," Moat noted.

Eircom announced it would not pursue plans for a stock market listing shortly before the end of its fiscal first quarter, following "encouraging signs of positive momentum" during the period. An IPO was one option discussed by the company's board of directors at a strategy meeting in June.

Former CEO Herb Hribar quit the company shortly after that decision. Moat, who at the time was the company's CFO, was appointed acting CEO before being confirmed as the new chief executive earlier this month.

For more:
- see Eircom's fiscal Q1 earnings statement [PDF]
- view the company's CEO announcement

Related Articles:
Eircom CEO Hribar stands down
Eircom decides against an IPO for now
Eircom agrees long-term network sharing deal with Three Ireland
Report: Setanta in MVNO talks with 3 Ireland
Report: Carphone Warehouse plans to launch Irish MVNO
Eircom says IPO among its options to improve balance sheet as competition increases

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