eircom Wants State Role In Network Company

Press release
12th Oct 2007

Eircom’s chief executive has given the clearest indication yet of how he thinks a separation of the telcom’s retail and network divisions could operate.

In an interview with The Irish Times yesterday, Rex Comb said that a separate network company, which would include the Government-owned metropolitan area networks (MANs) that provide high capacity broadband rings in a number of regional towns, would be “highly regulated” but would have the freedom to “invest in the future longevity of the national asset”.

Last week it emerged that Eircom had written to the communications regulator and the Department of Communications outlining plans to split the companies. Babcock & Brown, the investment house which owns Eircom, is planning to sell the retail division, possibly to a large European telco, and retain the more lucrative wholesale division.

“This is the other thing we have been saying to the Government,” said Mr Comb. “Can you put all the assets into one (company). There’s all your assets, invest in the future and everyone can have access to it. We think that’s a possibility that should be explored.”

Mr Comb also suggested that given the strategic importance of the network company it would make sense for the Government to be a shareholder.

He also said it made more sense for a structural separation into two companies with different owners rather than a functional separation such as BT has undergone in the UK. He questioned how successful the UK model was, given that BT does not currently intend to invest in bringing next generation broadband technologies the “last mile” to users’ homes.

Despite Eircom’s interest in the MANs, Mr Comb questioned the Government’s funding of them. “My question about the MANs is whether that’s the best way to spend the money with the issues that Ireland faces?” said Mr Comb. “We have one transportation system – we don’t have two road systems. If it’s been done to create competition show me the numbers.”

Mr Comb said that in all but one of the 24 towns where the MANs are operational, Eircom already has a fibre optic infrastructure in place. Mr Comb also questioned the relevance of the universal service obligation, whereby Eircom is obliged to provide a phone service to every premises in the country that wants it.

John Collins, The Irish Times