Weekly Digest
Weekly Digest Issue No. 466
21-05-2009
by Deirdre McArdle
Going is good at BT | HP to cull jobs, Ireland ok for now
New Eircom head has uphill climb
Following last week's major restructuring announcement, in which Eircom outlined its plans to cut 1,200 jobs, the telecoms firm has named Paul Donovan as its new CEO. Donovan was formerly head of Vodafone Ireland and more recently he headed up Vodafone Central Europe, Middle East and Asia Pacific. He will take up the reins at Eircom on 1 July, taking over from acting-CEO Cathal Magee. Donovan will have a lot to deal with in his new role. The job cuts of last week are stage one of a restructuring programme, indicating there's more to come. The firm also has to figure out how to service its EUR3.8 billion debt and to reverse a pension deficit of EUR433 million. Of course, there's also the matter of Eircom's future ownership; TaemasBridge is still hanging around, and reports also suggest that Irish telecoms entrepreneur Sean Melly has made a play for the former incumbent. Melly is reportedly in "advanced talks" with investment bank JP Morgan about putting together a finance package to restructure Eircom's debt. Singapore Technologies Telemedia is also believed to have made an offer for the firm.
Vodafone hit by customer departures
Meanwhile, Donovan's former employer, Vodafone Ireland, is seeing a continuing fall-off in user spending as well as a drop in subscribers. The mobile operator said it had a total of 2.26 million customers for the year ending 31 March 2009; this is down from the 2.33 million users it had at the end of March 2008. Some reports suggest the drop in customer figures could be as a result of the large number of foreign workers leaving Ireland to return home. However, it's worth noting that at the end of its fourth quarter O2 Ireland reported its highest customer figures ever at 1.728 million. Vodafone's first year in the fixed line and DSL market has been a success: it had 83,188 customers at year-end. The operator has approximately 190,000 mobile and fixed broadband customers, making it the country's second largest broadband provider, according to Vodafone. Despite the growth in the broadband sector of its business, Vodafone Ireland's core business has been hit by consumers tightening their belts and the increased competition in the market. Monthly average revenue per user continued its downward spiral, dropping 6 percent to EUR39.10 at year end. Vodafone Ireland's results came as its parent group saw its full-year net profit more than halve, as the operator took a STG5.9 billion write-down on the value of its operations in Turkey, Spain and Ghana. The mobile giant said it planned to "accelerate" its cost-cutting programme and declined to give revenue guidance for the coming year.
Going is good at BT
BT Ireland, on the other hand, is having a good run of it. The telecoms operator's results for the year to 31 March revealed an 18 percent growth in EBITDA (earnings before interest, tax, depreciation and amortisation), although underlying revenues dropped 4 percent to STG800.8 million. The operator has netted a number of lucrative contracts during the past few months, most notably the five-year contract to provide the 999/112 emergency call answering service in Ireland. The deal will involve a EUR10 million investment and will create 100 jobs at three locations around the country. This include 50 jobs at a new facility in Ballyshannon, Co Donegal. The other two locations are in Navan, Co Meath and East Point Business Park in Dublin. According to Communications Minister Eamon Ryan, BT will "completely modernise the way this service operates and improve it beyond measure". New features include automatic location identification, which means that a person in an emergency situation who is unable to state their location for any reason will be located automatically using GPS technology. BT was also recently chosen by Three Ireland to be the principal sub-contractor for the delivery of the National Broadband Scheme (NBS). The deal will see BT deliver the radio site infrastructure and backhaul transmission to support the network rollout. Though the BT Group announced plans to reduce its staffing levels by 15,000 through voluntary redundancies and natural attrition, reports suggest that the company is not expecting to cull of any of its 3,000 Irish staff.
HP to cull jobs, Ireland ok for now
Following its earnings announcement on Tuesday evening, PC maker Hewlett-Packard outlined plans to cut an extra 2 percent of its global workforce. This works out at around 6,400 jobs worldwide and is in addition to a previous cull of 24,000 jobs around the world. At that time around 100 jobs were cut at the company's Irish operations. HP employs around 4,000 people in Ireland. In a statement, the PC giant said: "There is no indication as of yet that HP Ireland will be impacted by the proposed cuts in the global HP workforce." The statement also highlights HP's recent market share gains in Ireland, and said that the firm was "well advanced" in its recruitment plans for 500 new positions as it expands its global service desk operation in Leixlip, Co Kildare. In its earnings call HP reported net profit of USD1.7 billion, or USD0.86 per share, in the second quarter of its fiscal year, down 17 percent from USD2.1 billion, or USD0.87 per share, a year ago. This was in line with analysts' expectations. Meanwhile, revenue was down 3 percent year-on-year to USD27.4 billion. Looking ahead, HP said it expects third quarter revenue to be flat and full fiscal year revenue to decline by 4 to 5 percent, with full-year earnings per share of between USD3.76 and USD3.88. The proposed job cuts will take place within the next 12 months.
Worms and phishers flock to Facebook
As it becomes more and more popular around the world, Facebook is having to deal with an increase in phishing and malware attacks. Just a couple of weeks after becoming the target of a phishing scam, the social networking site was hit by a similar con again this week. Hackers gained access to the site and used legitimate accounts to send e-mails to other users, directing them to a fake Facebook site where they were asked to log in. The fraudsters were then able to steal the unsuspecting Facebook members' passwords, and so the cycle continued. Facebook reacted swiftly to the threat, blocking the phishing e-mails and automatically re-setting the passwords of users who had fallen for the scam. Another recent Facebook attack came in the guise of a worm called 'Koobface'. The worm encourages a user to click on a malicious link that appears to come from a Facebook friend. However, when the user visits the link, they are told that the Flash player they have currently installed is out-of-date and prompts them to download a "Flash update" flash_player.exe file, which is in fact none other than the 'Koobface' worm. It's not clear at this stage if the worm is causing harm to users' PCs or simply being used to propagate the malware. Social networks are proving to be prime hunting ground for fraudsters: recent research from Kaspersky Lab shows malware on social networking sites is 10 times more successful at infecting users than e-mail-based attacks.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 