Eir remains stale as French fillip fails to materialise

Cuts put respectable sheen on half-year results but customer service woes not helping

The launch of the Eir brand in 2015. Photograph: Eric Luke

The launch of the Eir brand in 2015. Photograph: Eric Luke

 

It will be one year next month since a consortium led by French telecoms tycoon Xavier Niel took over Eir. The company reported its half-year results yesterday. Plus ça change. The performance was, in almost every sense, flat, as it has been for a while now. No French fillip yet for our largest telco.

In the second quarter – the three months to the end of December – Eir’s revenues were precisely the same as the corresponding period the prior year. Half-year fixed-line revenues were actually down by €6 million, due to lower retail broadband sales.

Quarterly earnings at Eir were up by €19 million, but that is because costs were cut by €19 million. Staff numbers were down 5 per cent.

As its fibre network roll-out intensifies, and the requirement to keep employing all those expensively paid copper network engineers diminishes, there may well be more costs left to strip away.

But eventually, after repeated cuts upon cuts, the marrow begins to show and it becomes clear that a company’s financial buoyancy cannot be maintained by cutting alone. Eir must grow.

The economy is due to expand by about 4 per cent this year, assuming Brexit doesn’t queer the pitch too much. Commerce is booming, consumer sentiment – again, assuming Brexit is solved – is doing just fine. The opportunity should be there for Eir’s top line to hit an upward curve.

But to grow, Eir must compete. The company boasts often of its expensive fibre rollout, which allows it to launch faster, better services. Its strategy is built around reaping the revenue rewards of this outlay through more customers.

If you build it, they will come, but only if they trust you. Eir’s well-documented customer service woes could not have come at a worse time for the company. A reputation such as it has can be hard to shake.