Labour calls for Eircom buy-back

Labour Party leader Eamon Gilmore has today called for Eircom for be taken back into public ownership.

Speaking in Sligo this morning, Mr Gilmore said the privatisation of Eircom had been a "disaster" for the State and for its customers.

“Since privatisation the company has been bought and sold like a clapped-out second hand car. The value of the company has collapsed, those who invested in the original share offer lost heavily, the quality of service to the public has deteriorated and it has failed to deliver the level of infrastructure required," he said.

"Instead of investment going into upgrading our telecommunications infrastructure, billions have been pocketed buying and selling the company. No one has been representing the public interest in developing universal access to high-quality broadband.

"Each new owner stripped Eircom of more and more capital, leaving it loaded with debt. No one was interested in making the long-term investment required in the network. As a result, we’re left with one of the worst levels of broadband penetration and speed in Europe. This has serious impacts on our competitiveness, and particularly for regional development," the Labour leader said.

“The latest bid for the company by a group of Australian businessmen would not be in the interest of the country, its customers or the workers. The bidders are already promising to shed yet more jobs and they, like those who went before them since privatisation, will be more interested in picking the bones of the company, than in developing the communications infrastructure the country needs," he said.

Mr Gilmore said job creation meant installing broadband now but warned this would not happen "if Eircom remains in the grip of speculators".

“It is time to end the sorry saga of Eircom. The company should be bought back by the State. . . . The Government simply cannot sit back and do nothing as Eircom is sold at a bargain-basement price. If Eircom is on the market for €95m, or anything like it, then the State should step in and acquire the company. Nationalisation will not solve all of Eircom’s problems, but it could be a vital first step to dealing with the broadband gap."

Taoiseach Brian Cowen refused to be drawn on earlier Fine Gael calls on the Government to buy back Eircom, however, saying he would await a briefing from Minister for Communications, Energy and Natural Resources Eamon Ryan.

Eircom came under further pressure yesterday when ratings agency Moody’s placed €3.65 billion of its debt under review for a possible downgrade.

On April 16th, an Australian-based group of former Babcock Brown executives tabled a A$175 million (€95 million) cash offer for the entity that owns Eircom and warned that the Irish telecoms business might default on its debts.

Chambers Ireland today called on Eircom’s parent company, Babcock & Brown Capital, to reject the bid by the TaemasBridge group.

Claire Cunningham, Digital Policy Council chairwoman, said: ”“The TaemasBridge group proposal appears to be funded by a simple leveraging manoeuvre using up what are essentially Eircom’s cash reserves to fund the purchase . . . this strategy is of questionable value to Eircom’s interests and those of the company’s wider stakeholders.”

Eircom has informed trade unions it wants to cut 1,250 jobs from its 7,500-strong workforce over the next 18 months as part of a strategy to seek savings of about €130 million a year in its cost base.

Mr Gilmore, who was speaking at the launch of the election campaign for Susan O'Keeffe, Labour Euro candidate for Ireland North West, said the surprise decision of Fianna Fáil MEP Sean O’Neachtain to withdraw had significantly opened up the race for seats in the North West Euro constituency.