Eircom rules out Meteor sale to cut firm's €3.8bn debt

EIRCOM HAS no intention of selling its mobile arm Meteor, and plans to split the telecoms company in two have been shelved for at least 12 months, chief executive Rex Comb said yesterday.

Speaking after the release of third-quarter results by Eircom, Mr Comb indicated that Meteor - a star performer for the telco - would not be offloaded to try and reduce the company's €3.8 billion debt.

Reports have suggested that Meteor is valued at €1 billion by Babcock Brown, Eircom's Australian owner.

"We are not going to sell it," Mr Comb said emphatically. "It's been a huge growth engine for us and there's a huge opportunity to grow the business further."

Meteor had 975,000 mobile customers at the end of March 2008, a year-on-year increase of 17 per cent. It added 13,000 new customers in the three months to the end of March. Mr Comb said it should break the million barrier by the end of June.

In the nine months to the end of March, Meteor made an operating profit of €16 million on revenue of €358 million. This compared with an operating loss of €4 million on turnover of €280 million in the same period of the previous financial year.

Mr Comb said Eircom was investing heavily in the rollout of Meteor's 3G network and had also invested "tens of millions" in a new billing system for the mobile provider.

A commercial launch of 3G services is likely later this year.

Mr Comb said it was also testing the Eircom brand in the mobile space with small and medium-sized companies.

In relation to the much-publicised proposal to split Eircom in two - separating the retail business from the network - Mr Comb said this was not on his agenda.

"This is an issue that I believe would be good for Ireland but it's in a holding pattern at the moment," he said. "It's not on my radar for the next 12 months."

Eircom's results show that while Meteor flourished, its fixed-line arm struggled for growth.

Fixed-line revenues grew by just 1 per cent to €413 million in the three months to the end of March while the total traffic minutes declined by 18 per cent to 1.9 million.

Basic voice traffic revenue declined by 2 per cent year on year in the quarter to €94 million but income from broadband rose by 28 per cent to €39 million.

Eircom added 37,000 DSL broadband customers in the three months to the end of March, bringing its total broadband subscriber base to 571,000.

Eircom said the headcount in its fixed-line business had declined by 476 since July 1st, 2007. It expects to meet its target of 900 voluntary redundancies by the end of 2009, which would be ahead of target.

The fixed-line business employed 6,549 workers at the end of March.