States Assembly | Report on Eircom move to structural separation

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Eircom moves closer to split COLT Ireland 05-10-2007

by Emmet Ryan COLT Ireland

The Department of Communications has confirmed reports in the press on Friday that Eircom has made a submission regarding splitting the company.

A spokeswoman for the Department told ENN that Eircom made the submission recently and that the Minister for Communications, Energy and Natural Resources, Eamon Ryan, is currently studying it.

"It's a private firm so it can split if it wants but obviously the Department would be interested in ensuring the move benefited consumers," said the spokeswoman. "Were there a split then there would probably be new regulations put in place to ensure consumers were treated fairly."

She said any new regulations would follow consultation between Eircom, the Department and ComReg. The spokeswoman added that the submission covered a wide range of areas aside from the split, including broadband and next generation networks.

A spokesman for Eircom said the telco was not commenting on whether any decision regarding a potential split had been made but that it was an option the firm was considering. "Separation is something we want to explore further," said the spokesman.

The prospect of Eircom parent Babcock & Brown selling off the telco's retail and mobile arm while retaining the lucrative wholesale arm was first mooted in July, with the potential sale valued at EUR1.8 billion, not bad considering the Australian investment firm paid EUR2.4 billion for the entire company when it bought Eircom in 2006.

The Department of Communications told ENN the Programme for Government was in favour of a split in Eircom; despite this potential backing though the former incumbent may still face some obstacles before a division is complete.

In August unions aired their disapproval of the prospect of a split in the firm. At the time the Communications Workers Union, the largest Eircom union, said it would use "all means at its disposal" to oppose a split and was unhappy with the way the proposal had been managed.

The road ahead may be lucrative for Eircom but it's likely to encounter a bump or two on the way.