Eircom has reported a pretax profit of €655 million for the 12 months to the end of June. The result was boosted by a strong contribution from the group's mobile subsidiary, Meteor, and continued growth in broadband users.

Earnings before interest, tax, depreciation and amortisation were up 7 per cent compared to the previous year. However, this is before exceptional items - notably a €170 million restructuring charge to cover the cost of 900 planned redundancies.

Revenue for the Eircom group of companies was up 12 per cent to €1.97 billion.

The Meteor subscriber base increased 28 per cent over the year to 875,000, with 43,000 net subscribers added in the most recent quarter. The average revenue per user was €39.80 for the year, up 5 per cent. "We are in a good position," said Eircom chief executive Rex Comb. "One million subscribers is the next target."

By the end of June, Eircom had 455,000 broadband subscribers, and this had increased to 479,000 by August 16th. Mr Comb said new broadband users were being added at a rate of about 4,000 a week.

Eircom claims that broadband penetration is now 16.2 per cent compared to the EU average of 18 per cent.

The accounts include a once- off charge of €170 million to cover the cost of 900 voluntary redundancies which Eircom is seeking over the next three years.

"It's early days, but we are seeking 400 redundancies in year one of the programme," said Mr Comb. "We are in discussions with the Communication Workers' Union [ CWU] and they understand the competitive pressures we are under."

Mr Comb said relations with the CWU were "cordial" and both sides had "put behind them" the differences that had led to the threat of industrial action earlier in the summer.

Although Eircom suffered a 2 per cent fall in the number of subscribers in the landline market over the year, growth in broadband meant the "total access channels" provided grew by 11 per cent to 2.48 million.

Mr Comb said John McElligott, managing director of eBay Ireland, was "probably right" when he criticised the slow speed of broadband services in the Republic. He said Eircom was testing VDSL technology in two Dublin telephone exchanges which would allow for speeds of up to 25 megabytes per second and would support services such as on-demand television.

Mr Comb said average network usage by broadband subscribers has quadrupled over the year and this was driving demand for faster broadband speeds.

He said Eircom was upgrading 25 exchanges a month as part of its commitment to bringing broadband to an additional 400 exchanges by 2009.

Mr Comb reiterated that Babcock & Brown wanted a "structural separation of the company" by splitting it into a wholesale and retail arm. He also confirmed an interest in the Government's Metropolitan Area Networks. "We are happy to look at that. It's worth exploring," he said.

Mr Comb said Eircom would also consider providing a mobile broadband service through Meteor once it had completed the build-out of its 3G network.