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Eircom Group plc is an Irishmarker Telecommunications company, and former state-owned incumbent. It is currently the largest telecommunications operator in the Republic of Irelandmarker and operates primarily on the island of Irelandmarker, with a point of presence in the UK.

As Bord Telecom Éireann, the company was (until 1999) a state monopoly; as a private company it continues to dominate many telecommunications areas, its main competitors are UPC Ireland (owner of Chorus & NTL networks) which operates its own cable network, Vodafone Ireland (recently bought BT Ireland's residential customer base), accessed via eircom's network and BT Ireland's fibre,Imagine Group(Irish Broadband & Gaelic Telecom) and Magnet Networks and Smart Telecom, with a mix of LLU/GLUMP from Eircom and fibre.

Eircom currently operates the fixed-line telephone network, a HSDPA (3G) and GSM/EDGE (2.75G) mobile telephone network Meteor (acquired from AllTel (Western Wireless) in 2005) and act as an internet service provider (ISP) Eircom.net. Eircom also operate a property alarm installation and monitoring unit called Eircom Phonewatch. Eircom broadband had a 49% share in 2006 and Eircom fixed voice lines 72% in 2006 Comreg via Silicon Republic. Current market share analysis is at comreg's site by late 2007 Eircom added their 500,000th DSL subscriber but broadband share may have fallen to 44% due to growth of Fixed Wireless, Cable and Fibre services (see enn reports Comreg Sep. 2007).

Services

Eircom operate the largest fixed-line telecommunications network in the Republic of Irelandmarker, under licence from the Commission for Communications Regulation. Most homes and businesses in the state are connected by this network. A full range of telecommunications services is provided on the network including Business IP, its MPLS platform. Eircom have also recently completed a wholly-owned fibre network ring around Northern Ireland and another around Belfast. Their ISP division, Eircom Net, provides dial-up services, as well as broadband (see broadband roll-out, below) services. Eircom Phonewatch provides burglar alarm and home monitoring services. Any Alarm monitoring products using SMS are "hardcoded" to work with Eircom's SMSC, so will not work on Digiweb, BT, Smart, UPC or Magnet phone networks. DECT SMS handsets are also preprogramed for Eircom's SMSC. Any competing phone service that is not just CPS of Eircom must provide their own SMSC, but even when they do, consumers may be unable to migrate from Eircom due to SMSC numbers in equipment that can't be reprogrammed.

Eircom's mobile arm, Meteor, provides a full range of HSPA/(3G) and GSM-based mobile communication services throughout the Republic of Ireland. Its GSM network operates at 1800 MHz and 900 MHz ranges, as the earlier GSM licences fully utilised the 900 MHz band. GPRS and EDGE data services are also available. Meteor have recently launched HSPA (3G Mobile Broadband) services in Dublin, Cork, Dundalk and Drogheda. Meteor provides both bill-pay (contract) and pre-pay (non-contract) plans and has approximately 19% of the Irish mobile market, with 1,032,000 cellular subscribers on the Meteor Network. The company currently uses EDGE technology on its network and has received a 3G (UMTS) licence recently removed from Eircom's competitor, Smart Telecom. (This requires 33% of the population to be covered by 3G by September 2008.)

As an operator with significant market power, Eircom is required to provide a number of wholesale products to other operators and to switch calls onto other phone networks. Many broadband products offered by other operators are resales of the Eircom product.

Eircom's PhoneWatch subsidiary provides monitored burglar alarms, fire alarms, CCTV systems, and medical alert devices.

Eircom has been subject to much criticism in the performance of its activities. See the criticism section below for more details.

History

The company was formed in 1984 as Bord Telecom Éireann, under the Posts and Telecommunications Act 1983. This article deals mainly with the post-privatisation Eircom. For details of the company during its time as a state-sponsored body, see the Telecom Éireann article.

Privatisation

Due to EU laws requiring the opening up of the Irish telecommunications market, Telecom Éireann was privatised, this was very controversial and subject to much debate. The process began in 1995, and by July 1999 the government had disposed of virtually all of its shareholding. Eircom plc was then floated on the Irish Stock Exchange, London Stock Exchange, and New York Stock Exchangemarker on July 8, 1999 and small/first-time investors were encouraged by the Irish Government to buy shares. The share price was set at €3.90. It later reached a high of €4.80, a 23% increase. Those initial investors that held onto their shares until July 2000 received a 4% bonus share allocation.

The Eircom flotation is considered to have been an example of a stock market bubble — after the initial hype of the flotation died down, the stock price fell rapidly. Many of the 500,000 small investors were angered by the significant financial loss they incurred, blaming the government for not sufficiently warning them of the risks inherent in stock market investment.

Since privatisation Eircom penetration of landlines has fallen from 82% to 69%. During this period there has been a large increase in mobile phone ownership and a significant rise in line rental to the highest in Europe.

Disposal of Eircell, going private and reflotation

Eircell Limited
In 2001, Eircom sold its mobile subsidiary Eircell to Vodafone. The company was transferred to a separate entity, Eircell 2000 plc which was then sold to Vodafone via a share swap. Eircom shareholders got 1 Eircell 2000 share for 1 eircom share. The conversion rate was then 0.9478 Vodafone shares for every 2 Eircell 2000 shares. This left the Eircom shareholder with not only shares in Eircom, but Vodafone also.

After the sale of Eircell, Eircom itself was believed to be undervalued and became the subject of a bidding war between two consortia – the E-Island consortium headed by Denis O'Brien, and the Valentia Consortium headed by Tony O'Reilly, the chairman of Independent News and Media. Eventually in November 2001 the company agreed a recommended offer of €1.335 per Eircom share. Eircom Plc was delisted from the stock exchange, become Eircom Limited, a private limited company by shares and a subsidiary of Valentia, and O'Reilly took the reins as Executive Chairman (a role he pursued with vigour, even holding management meetings at his Castlemartin home).

On 19 March 2004 the company returned to the stock market (although the company being listed, Eircom Group plc, was in fact a new holding company, and was registered in England and Wales rather than the Republic of Irelandmarker). The company floated at €1.55 a share, but dipped on initial trading before recovering to trade above its float price.

Return to mobile – acquisition of Meteor

In early 2005, several Irish newspapers reported that Meteor Mobile Communications, the third mobile phone operator, was up for sale by its owners, Western Wireless. It was considered that this afforded Eircom an opportunity to re-enter the mobile communications market. On 9 July 2005 it was reported by The Irish Times that there had been three bidders for Meteor: Eircom, Smart Telecom, and a consortium led by Denis O'Brien. On 14 July 2005 RTÉ News reported on their business website that Denis O'Brien had withdrawn from bidding, and that it was understood that Eircom was the top bidder at €410 million. On 21 July it was announced that Smart Telecom had also withdrawn, leaving Eircom as the sole bidder. Eircom announced the agreement to purchase it on 25 July 2005 at a cost of €420m.

Meteor now have over 1,000,000 customers as of September 2008 and a market share of 20%, offering both GSM and 3G mobile telephony and broadband services.

Eircom Mobile (MVNO)

As part of their mobile strategy Eircom have also launched Eircom Mobile aimed at the Business market, this is to be complementary to the Meteor division (mainly used by residential wireless customers). Eircom Mobile is an MVNO which uses the Meteor Network for its services to business customers, to compliment the residential and business mobile services currently offered by Meteor.

Eircom Northern Ireland

Eircom NI, is the name of the company's operations in Northern Ireland. Based in Belfast, Eircom own and operate a fibre-optic network ring around Belfast and Northern Ireland, linking into the national Eircom Network in the rest of Ireland. Eircom NI have won significant contracts thus far, the largest being the stg£100m "Network NI" contract for the Northern Ireland Civil Service, and another for Northern Ireland Water. The company in Northern Ireland currently provides services to local government and SME sectors.

Swisscom approach

On 2 November 2005 it was reported that the Swissmarker telecommunications company, Swisscom AG, had made an approach to Eircom regarding a possible takeover of the company. However on 25 November the Swiss government announced that it would use its controlling stake in Swisscom to block any foreign takeovers, effectively ending hopes of a bid.

Babcock & Brown

In May 2006 it was announced that Eircom was to be sold to the Australian investment group Babcock and Brown in a deal worth €2.4 billion. The Employee Share Ownership Trust, which represents workers at the company, was to remain a minority shareholder. The sale was approved by shareholders on July 26, 2006 and at close of business on 17 August 2006 the shares were delisted from the Official Lists of the Irish Stock Exchange and the London Stock Exchange, ending Eircom's second period on the stock markets. The same day, Phillip Nolan resigned as chief executive of Eircom and on 1 September Rex Comb was officially named as the new CEO. Tony O'Reilly resigned as Chairman and was replaced by Pierre Danon, previously of BT Group plc and JP Morgan Chase.Babcock and Brown have since collapsed as a company and their BCM vehicle, which owns over 50% of Eircom, have recently broken all ties with the former parent and rebranded themselves as Eircom Holdings Limited.

Eircom League

The logo of the eircom League, which existed from 2000 to 2008
In 2000, eircom signed an eight-year deal to sponsor the League of Ireland. The sponsorship oversaw the change to a summer league, the Premier Division becoming fully-professional, performances in Europe improving dramatically with clubs knocking out teams like Aberdeen, Gretna, Gothenburgmarker and Elfsborg and the financial collapse of the clubs who achieved those results. However, in 2008 after the deal ended, eircom did not renew it.

Competition

While Eircom retains a virtual monopoly, at around 70%, on fixed line telephony in the State (the only exceptions being those operated by UPC Ireland cable company (formerly NTL Ireland and Chorus), Digiweb Metro and some fibre offerings from BT, Magnet Networks, Smart and Digiweb). Chorus previously offered wireless telephony but failed to renew their licence) it is required to allow carrier pre-selection (CPS). Introduced in Ireland in 2001, CPS allows subscribers to use an alternative provider for all their calls, without the need to dial indirect access codes or numbers, although they still receive a bill from Eircom for line rental. Under a wholesale line rental scheme, it is now possible for customers, to have a single bill from an alternative provider, for example, BT Ireland, including the cost of Eircom line rental, rather than continuing to receive a separate one from Eircom for this cost. However, unlike the UK, where BT's competitors can now charge less than BT for line rental, it is not yet possible for operators in Ireland to buy the lines from Eircom and charge their own rate for line rental, should they wish.

Criticisms of Eircom

After the privatisation of Eircom, the highly profitable mobile phone division, Eircell, was sold to Vodafone. Some consider this act to be asset stripping by the large investors with interests in eircom.

Eircom announced in June 2007 that from 30 July line rental charges would increase by €1.18 bringing line rental charges – already the most expensive in Europe to a total of €25.36 per month for a PSTN analogue line, one source indicated it was the highest line rental charge in the world. Also announced was an increase of between 4.8 and 4.9% on local and national calls. These moves have been criticised as excessive profit-taking and abuse of a dominant position in the market.

Broadband roll-out

As of Q2 2006, 370,000 customers have broadband, 260,000 on DSL and the others on a mix of FWA, cable and satellite. (Comreg, Q1 2006, Page 19).

On 1 November 2007, Eircom announced their 500,000th DSL customer Eircom press announcement via finfacts.

In terms of speed and availability Eircom exchanges can only deliver broadband to houses within 5 km in most of its exchanges and will not be investing in fibre optic and next generation broadband as stated in a meeting with members of dail eireann im late 2008 about broadband availability.

On 21 February 2009, the Irish ISP Eircom declared that it would soon block access to the Pirate Bay. However on 24 February 2009, Eircom issued a statement saying that they would not block the Pirate Bay without a court order.

On Monday, 21 April 2008 18:36, Eircom rejected claims by four major record companies that it, as the largest broadband internet service provider in the State, must bear some liability for the illegal free downloading of music by computer users. Eircom have thus far managed to come to an agreement with the companies involved, stating that they will be working in conjunction with these companies to prevent large amounts of copyrighted material being shared through the ISP. This in turn raises concerns over internet privacy, since presumably this will be done by monitoring the IP traffic associated with Eircom's customers. It is not known whether or not this bears any significance on the Meteor Mobile network, a mobile broadband supplier recently acquired by Eircom. Eircom has reportedly signed an out of court settlement with the said companies and are initiating a program to clamp down on piracy within their network by instituting IP monitoring service, accessible by the Irish Recorded Music Association (IRMA) and allowing up to three warnings before disconnection of service.

Eircom users that try to access The Pirate Bay now receive the following message:

"On the 24 July 2009, an Order was made by the High Court requiring eircom to block or otherwise disable access by its subscribers to the website thePirateBay.org, its related domain names, IP addresses and URLs. The Court was satisfied that on the basis of the evidence presented by the record companies that the PirateBay website is a website that facilitates the exchange of copyrighted sound recordings without the consent of the copyright owners.

"eircom recognises the legitimate rights of the owners of copyrighted material and believes that individuals who share or download copyrighted material without the authorisation or the permission of the copyright owner are acting illegally.

"The Order further provides that should the PirateBay website content be legitimatised in the future, then eircom has liberty to apply to the Court to have the Order vacated and access to the PirateBay website enabled.

"eircom in compliance with the Order has agreed that access to the website the PirateBay.org, its related domain names, IP addresses and URLs from the eircom network will be blocked indefinitely from the 1st September 2009."

OneVision Irish DTT License application

On May 1, 2009 Fintan Drury, chairman of the OneVision consortium (made up of the TV3 Group, Arqiva, Eircom and Setanta Sports), announced that OneVision is to enter negotiations with the BCI with the view to takeover operations of the Irish pay DTT service. If negotiations are deemed successful it may see the launch of DTT in late 2009/early 2010 at a proposed operation cost of €40 million. OneVision aspire to offer 23 channels coinciding with the free-to-air channels. See OneVision for further information on the subject.

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