Eir (telecommunications)

Eircom Limited
Limited company
Industry Telecommunications
Founded 1999
Headquarters 1HSQ, St. John's Road,
Dublin 8, D08 A9RT, Ireland
Key people
 Richard Moate (CEO)
Padraig McManus (Non-Executive chairman)
Products Telephone, Mobile telecommunications, Internet, Digital TV
Revenue €1.265 billion (FY 14/15)
€1.3 billion (FY 15/16E)
Owner Eir Holdings Ltd.
Number of employees
 3,437
Subsidiaries Meteor Mobile Communications
Open Eir
Eir Business NI
eircom Net (ISP)
LAN Communications
Eir UK
Eir Mobile
Eir Vision
Website eir.ie

Eircom Limited, trading as Eir, is a fixed, mobile and broadband telecommunications company in Ireland, and a former state-owned monopolist. It is the largest telecommunications operator in the Republic, with a division to service the business and corporate telecom markets in Northern Ireland and Britain. As Bord Telecom Éireann, the company was state-owned until 1999, when it was floated on the Irish and New York Stock Exchanges.

Eir operates the fixed-line telephone network, an LTE (4G), HSDPA (3G) and GSM/EDGE (2.75G) mobile telephone network Meteor (acquired from AllTel (Western Wireless) in 2005) and acts as an internet service provider (ISP) eircom.net. As of Q1 2013, Eircom had 54% market share of fixed voice lines; 40% market share of fixed broadband; 11% of mobile broadband; and 17% of mobile.[1] 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.[2]

Its main competitors are Virgin Media Ireland (which operates a cable TV & Broadband network), Vodafone Ireland (which bought BT Ireland's residential customer base on 22 July 2009 and is accessed through Eir's network and BT Ireland's fibre), Imagine Communications (Irish Broadband & Gaelic Telecom) and Magnet Networks and Smart Telecom, with a mix of LLU/GLUMP from Eircom and fibre.

Services

Eir telephone exchange in Roches Street, Limerick

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

Eir'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 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 has used EDGE technology on its network and has received a 3G (UMTS) license, formally removed from Eir's competitor, Smart Telecom (this required 33% of the population to be covered by 3G by September 2008).

As an operator with significant market power, Eir 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 Eir product.

A series of telephone directories is distributed annually to all households in the Republic of Ireland. The six annual directories list numbers in the local dialling area (01, 02, 04, 05, 06 or 07/09), regardless of whether the telephone service to the number is provided by Eir or by one of its competitors. Mobile numbers are not listed. The Commission for Communications Regulation (ComReg) has designated Eir as the organisation that has the obligation to provide a National Directory Database (NDD) and a Universal White Pages (UWP) directory; the unit within Eir responsible for providing these is the National Directory Information Unit (NDIU).[3]

History

Telecom Éireann manhole cover

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 Eir; for details of the company during its time as a state-sponsored body, see Telecom Éireann.) From 1991 to 2013, Eir's subsidiaries included Phonewatch, then known as Eircom Phonewatch, which provides home monitoring services, monitored burglar-alarms, fire alarms, CCTV systems, and medical alert devices. In May 2013, it announced that Phonewatch had been sold to Oslo-based company, Sector Alarm Corporation.[4]

From 2000 to 2008, Eircom sponsored the League of Ireland.

Although EU laws required the opening of the Irish telecommunications market, Ireland had a derogation from competition until 2003. 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.[5] Eircom plc was then floated on the Irish, London and New York Stock Exchanges on 8 July 1999, and small/first-time investors were encouraged by the Irish Government to buy shares. The share price was set at €3.90, later reaching a high of €4.80, a 23% increase. Those initial investors who 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, Eir's 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

Logo of Eircom, used from 1999 until 16 September 2015

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 through a share swap. Eircom shareholders got Eircell share in a 1000/1 ratio. The conversion rate was then 0.9478 Vodafone shares for every 2 Eircell 2000 shares. This left the Eircom shareholder with shares in both Eircom and Vodafone.

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 to a recommended offer of €1.335 per Eircom share. Eircom Plc was delisted from the stock exchange, became 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 Ireland). 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

Logo 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, The Irish Times reported 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.[6] As of 31 December 2012, Meteor had over 1,086,000 customers and a market share of 20%, offering both GSM and 3G mobile telephony and broadband services.[7]

In May 2006, Eircom announced its sale to the Australian investment group Babcock and Brown as part of 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 26 July 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 Eir, broke all ties with the former parent and rebranded themselves as Eircom Holdings Limited.[8]

Eircom was also successful in bidding for a 4G LTE License from Comreg, which permitted Meteor and eMobile to launch 4G services in 2013.[9]

In September 2015, Eircom announced that it would re-brand as Eir as part of a new imaging campaign developed by Moving Brands. Described as being "dynamic and modern", the new brand was adopted across most of Eircom's businesses (excluding Meteor), and an advertising campaign was introduced to promote the new name and slogan, "Live Life on Eir".[10]

Acquisition of Setanta Sports and launch of eir Sport

eir Sport (previously Setanta Sports) commenced broadcasting on July 5, 2016 following the takeover of Setanta Sports by eir. Two Irish commercial stations, eir Sport 1 (formerly Setanta Ireland) and eir Sport 2 (formerly Setanta Sports 1), join BT Sport 1, BT Sport 2, BT Sport Europe and BT Sport ESPN to make up the 6 channel eir Sport pack. Setanta Sports was formed in 1990 to facilitate the broadcasting of Irish sporting events to international audiences.

Businesses

Eir Mobile (MVNO)

As part of their mobile strategy, Eir launched eMobile, a complementary service to the Meteor division (mainly used by residential wireless customers). Eir Mobile is a pseudo-mobile virtual network operator (MVNO) which uses the Meteor network for its services to residential & business customers, to complement the residential and business mobile services offered by Meteor.[11]

Eir Business Ireland

Eir Business Ireland is the corporate and SME operations in the Republic of Ireland. Eir Business have sponsored major Irish sporting events including the 'Dubai Duty Free Irish Open' in the K Club. Having secured significant business contracts with Druids Glen an internationally recognised Golf Resort in Co. Wicklow. Providing business solutions to Public bodies including University College Dublin (UCD), Ordnance Survey Ireland and Dublin City Council.

Eir Business NI

Eir Business NI is the name of the company's operations in Northern Ireland. With the division based in Belfast, Eir own and operate a fibre-optic network ring around Belfast and Northern Ireland, linking into the national Eir Network in the rest of Ireland. Eir Business NI have won significant contracts thus far, the largest being the €100m "Network NI" contract for the Northern Ireland Civil Service, with other significant contracts as operator of choice for Northern Ireland Water and Viridian, though have lost a number of major contracts recently. The company in Northern Ireland provides services to local government and SME sectors.

Television

Eircom phonebooth in Grafton Street, Dublin

As Telecom Éireann, Eir owned 75% of the cable operator Cablelink (the other 25% was owned by RTÉ). Cablelink was sold to NTL in 1999 and subsequently bought by UPC.

As Eircom, Eir joined a consortium with TV3 Group, Arqiva, Eircom and Setanta Sports called OneVision to apply for the Commercial licence for DTT. On 1 May 2009 Fintan Drury, chairman of the OneVision consortium, announced that OneVision was to enter negotiations with the BCI, with the view to take over operations of the Irish pay DTT service.[12] It was hoped that the launch of OneVision would happen in late 2010/early 2011 at a proposed operation cost of €40 million. OneVision aspired to offer 23 channels coinciding with the free-to-air channels.[13] However, OneVision subsequently dropped out of negotiations with the BCI.

In 2013 Eir began providing a TV service along with its eFibre service called eVision.[14]

Competition

Eir retains a virtual monopoly of 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 had offered wireless telephony but failed to renew their licence. Eir 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 Eir for line rental. Under a wholesale line rental scheme, it is possible for customers, to have a single bill from an alternative provider, for example, Vodafone, including the cost of Eir line rental, rather than continuing to receive a separate one from Eir for this cost. Unlike the UK, where BT's competitors now can charge less than BT for line rental, it is not yet possible for operators in Ireland to buy the lines from Eir and charge their own rate for line rental, should they wish.

Controversy

After the privatisation of Eircom, the highly profitable mobile phone division, Eircell, was sold to Vodafone.[15] Some consider this act to be asset stripping by the large investors with interests in Eircom.[16]

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.[17] Also announced was an increase of between 4.8 and 4.9% on local and national calls.[18]

In March 2011, Eircom pleaded guilty to a breach of the Data Protection Act at the Dublin District Court.[19]

Copyright enforcement

Blocking of the Pirate Bay

On 21 April 2008, 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. Eir 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 raised concerns over internet privacy, since presumably this would be enforced through the monitoring of IP traffic associated with Eir's customers. It is not known whether or not this bears any significance on the Meteor Mobile network, a mobile broadband supplier acquired by Eir. Eircom has reportedly signed an out-of-court settlement with said companies and are initiating a program to clamp down on piracy, within their network, by instituting an IP monitoring service, accessible by the Irish Recorded Music Association (IRMA) and allowing up to three warnings before disconnection of service.

As of 5 December 2013, Eir users who try to access The Pirate Bay 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."

Since September 2009, the Pirate Bay website have remained blocked by eircom.[20]

Disconnection

Eircom agreed to a controversial deal with the IRMA to activate a "three strikes system" so that users would be banned from the Internet for seven days if they appeared to be downloading copyrighted content through peer to peer filesharing networks.[21]

Examinership

Eircom notified the public in February 2012 that they had decided to no longer honour their debt, had entered default status and would not continue as a going concern. Eircom gave notification that they had cancelled a mandatory interest payment on their publicly-traded senior corporate bond, then due to mature in 2016.

On 29 March 2012, a number of companies within the Eircom Group presented a petition to the Irish High Court for the appointment of an examiner.[22][23][24][25]

See also

References

  1. ↑ Comreg. Comreg.ie (13 June 2013).
  2. ↑ See ENN reports Comreg Sep. 2007.
  3. ↑ Directory Information Licence Agreement. Eir.
  4. ↑ "Eircom sells Phonewatch division". Irish Examiner. 11 May 2013.
  5. ↑ "Enhancing Market Openness through Regulatory Reform" (PDF). Retrieved 15 November 2009.
  6. ↑ "RTÉ Business: Eircom mobile again, but shares drop". Raidió Teilifís Éireann. 25 July 2005. Retrieved 15 November 2009.
  7. ↑ Eircom Announces Second Quarter and Half Year Results To 31 December 2012 | Press Releases | Eircom Press Room. Pressroom.eircom.net.
  8. ↑ Triumph and disaster (28 April 2009). "BCM shareholders vote to cut ties with parent – Irish, Business". The Irish Independent. Retrieved 15 November 2009.
  9. ↑ ComReg reveals 4G auction results – €450m instant windfall for Irish Govt – Ireland’s communications news service –. Siliconrepublic.com (15 November 2012).
  10. ↑ "Eircom becomes Eir in €16m rebranding exercise". The Irish Times. 16 September 2015. Retrieved 26 September 2015.
  11. ↑ eircom announces launch of own-brand mobile service. Telegeography.com (8 May 2007).
  12. ↑ Airline charges (2 May 2009). "OneVision sets sights on paid-for TV project – Irish, Business". The Irish Independent. Retrieved 15 November 2009.
  13. ↑ "OneVision wants DTT licence – The Irish Times – Fri, 1 May 2009". The Irish Times. 1 May 2009. Retrieved 15 November 2009.
  14. ↑ https://www.eir.ie/tv/channels
  15. ↑ "eircom,Vodafone deal to go ahead". BreakingNews.ie. 9 April 2001. Retrieved 15 November 2009.
  16. ↑ "The insider: Barefaced cheek of Eircom chiefs: ThePost.ie". Archives.tcm.ie. 18 January 2004. Archived from the original on 25 October 2008. Retrieved 15 November 2009.
  17. ↑ Ailish O'Hora (21 July 2007). "Higher charges for phone users are on the line in telecoms sale". The Irish Independent. Retrieved 15 November 2009.
  18. ↑ electricnews.net 15-06-2007
  19. ↑ Cunningham, Grainne (22 March 2011). "Top telecoms firms fined for cold-calling customers". Irish Independent.
  20. ↑ Eircom Pirate Bay blockade takes effect. Torrentfreak.com.
  21. ↑ "Internet users face shutdown over illegal music downloads". The Irish Times. 1 January 2009.
  22. ↑ "eircom applies for examinership". The Irish Times. 29 March 2012. Retrieved 29 March 2012.
  23. ↑ "High Court to rule on Eircom's examinership tomorrow". The Irish Independent. 29 March 2012. Retrieved 29 March 2012.
  24. ↑ http://siteassets.eircom.net/assets/static/pdf/IR/Investor%20Update%2009_02_2012.pdf
  25. ↑ http://siteassets.eircom.net/assets/static/pdf/IR/Investor%20Update%2016_02_12.pdf

External links

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