Eir’s market share in Dublin underscores disaster that was privatisation

Flipped several times and starved of investment, firm attempts to regain lost ground

Perhaps the best illustration of how disastrous privatisation has been for Eir comes via its broadband market share in Dublin, which stands at just 20 per cent in contrast to Virgin’s 60 per cent.

Virgin came into the market in 2000 under the banner of NTL, which later rebranded as UPC, shortly after Eir was privatised. It had many bumps along the road initially but has invested huge sums in recent years under the ownership of John Malone, and has since wiped the floor with Eir. By contrast, Eir was flipped several times and starved of investment.

You can berate Eir for not investing in its regional network and for contributing to the fiasco that is rural broadband, but as a private company, beholden only to its shareholders, it is not obligated to undertake risky investments for the social good.

However, a well-run privatised entity, freed from its public service obligation, should, in theory, have been focused on cementing its dominance in the cities, where revenues and demand were never in doubt. Instead, it has been left behind by competitors.


Lost ground

Eir’s announcement that it is to invest €500 million in a new fibre network that will supply 1.4 million premises, including every town with more than a 1,000 homes, is an attempt to regain this lost ground.

It also comes less than a year after French telecoms billionaire Xavier Niel took control of the business in a process that neatly coincided with the company's exit from the National Broadband Plan (NBP) and a refocusing on cities and towns.

Since it has built out its fibre-to-the-cabinet infrastructure in Dublin, Eir's network has taken back some market share from Virgin, albeit on a wholesale basis through Sky and Vodafone rather than through its own retail arm. Sky is seen as strong on content because of its pay TV offering while Vodafone is cross-selling to its mobile customers. Either way, Eir as an incumbent telco with only 20 per cent retail market share in the capital is a stand out internationally.