Cantillon: Revamped Eircom throws down gauntlet

Who would have thought Eircom, a debt-ridden telecoms incumbent that has been passed from owner to owner in recent years, would suddenly look like a frontrunner again?

That’s essentially what the company achieved yesterday when it unveiled its long rumoured IPTV service, making it the first operator to offer significant quad play services – home phone, broadband, mobile and TV – to customers throughout the country.

Just 18 months ago, the group was in examinership as it buckled under the weight of its crippling debt, and there were few who could see how it would ever regain some of its former glory.

But things have turned around rapidly for the company, allowing it to throw down the gauntlet to UPC and Sky Ireland, both of which offer triple play services – broadband, home phone and TV – and have stolen market share from Eircom in recent years.

In particular, the launch of eVision gives Eircom a head start against rival UPC, which is still mulling its mobile offering. For cost-conscious consumers, an 18-month contract that undercuts the rivals on price might be simply too good an offer to ignore.

Offering quad play isn't the only area where Eircom has stolen a march on its rivals. Last month it surprised everyone when it announced that Meteor and eMobile were introducing 4G services to customers ahead of Vodafone, Three and O2.

Eircom has dealt with one of its major challenges successfully: getting the necessary infrastructure in place. Its e-fibre network is being rolled out across the country, providing the backbone for its IPTV service, with more than 1 million households expected to be able to access the updated broadband services by June.

The 4G mobile network for eMobile and Meteor is following suit. But now Eircom faces a new obstacle: capitalising on that early start.

It was UPC’s investment in its network a couple of years ago that allowed it to grow at the expense of the incumbent operator; Eircom must now do the same and make the most of its opportunity to compete with UPC. Eircom’s US-based shareholders will want to see a return on their investment as the company continues to roll out its new services. It must now follow through on its promises.