FIANNA Fail was poised last night to move into an attack against the Government over the sale of 20 per cent of Telecom Eireann, including accusations that the deal will actually cost KPN Telia just £123 million.
The party's spokesman on communications, Mr Seamus Brennan, has tabled several amendments to the Telecommunications Bill, which comes up for debate in the Dail tomorrow. These include that the 20 per cent stake should not be sold for any less than £300 million, and that the number of worker directors be maintained at four, rather than reduced to two.
Last night, Mr Brennan said he believed the strategic alliance process had been mishandled by the Minister for Communications, Mr Lowry.
"Eight of the world's top 10 telecommunications players were interested in Telecom, but because of ideological confusion in the Rainbow on the issue, these companies were scared off," he said.
Therefore, he added, KPN Telia knew it had the Government embarrassed, and was able to pay just £183 million. This valued Telecom Eireann at just three times profits, compared with a recent sale of part of German Telecom which was valued at 11 times profits, and the weekend's MCI British Telecom deal, which raised a proportionately even higher price.
"The KPN Telia deal is all the sweeter for these foreign companies given that they are likely to recoup £60 million of the money before long, with £30 million likely to result for them if Telecom has to sell Cablelink, while this amount again will go to KPN-Telia as a share of the 1996-97 profits." Mr Brennan continued.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)