IN THE PAPERS
In The Papers 28 May
28-05-2010
by Sylvia Leatham
Eircom sales fall 9 percent | O2, Three served legal papers by IRMA
The Irish Times reports that Eircom's sales fell 9 percent in the nine months to the end of March 2010. Group revenues dropped to EUR1.38 billion, with fixed-line sales 9 percent lower at just over EUR1 billion and mobile revenues falling 6 percent to EUR351 million. Earnings before interest, tax, depreciation and amortisation declined 3 percent to EUR497 million. Fixed-line customer numbers fell by 75,000 to 1.49 million, but it added 32,000 mobile customers over the period. Eircom said further cost cuts would be required and that it would seek to "accelerate the achievement of our March 2011 head count reduction target" of 1,200 job losses. Paul Donovan, Eircom chief executive, said this target should be reached by the end of September.
In other news of telecoms, the paper says that a survey of telco regulation in Europe has ranked Ireland sixth out of 22 nations but it "is generally weaker on the resulting regulatory and market outcomes". The 2010 Regulatory Scorecard produced by the European Competitive Telecommunications Association (Ecta) gives Ireland a score of 317 out of 400, placing it behind the Netherlands, Norway, the UK, France and Denmark. ALTO, the representative body for alternative operators, says the report shows Ireland's failings and the only way to tackle Eircom's dominance of the market is to break it into retail and wholesale businesses.
The paper also reports that investment by venture capital firms in Irish enterprises fell by 50 percent in the first quarter of the year, according to the IVCA, the Irish Venture Capital Association. The report states that 32 tech firms raised EUR26.6 million over the three-month period compared to EUR53.5 million a year ago. "While this is disappointing, the positive news is that the number of companies raising funds is the same," said association chairman John Tracey. "Individual activity has kept up but average deal size has fallen."
The same paper says that British mobile top-up group PayPoint suffered a steep decline in revenues for its business in Ireland last year. Revenues fell to STG24.5 million in the year to the end of March 2009, compared with STG29.5 million a year earlier, a drop of 17 percent. "There's been a significant contraction in top-ups, mainly because of the competition between the mobile networks, and then you have the wider economic conditions," said David Walton, PayPoint's commercial director in Ireland.
The paper also reports that the Irish Recorded Music Association (IRMA) has lodged initial legal papers against O2 and Three Ireland in an effort to get the mobile operators to implement a system that would cut subscribers off for sharing copyrighted material online. "O2 is currently reviewing the issue, but does not believe it is legally liable in relation to illegal filesharing activities that any of its customers might seek to engage in," said O2. A spokeswoman for Three confirmed it had received legal papers but said it was too early to comment further. Eircom introduced a 'three strikes' system earlier this week, as reported by ENN on Thursday.
The Irish Independent reports on the launch of a new online travel company, Clickandgo.com, by Gillian Bowler, founder of Budget Travel. The site allows users to package their own holidays. Bowler said old-style travel agencies were "in denial" about how the internet and the rise of self-packaged holidays had changed the industry.
The Irish Examiner notes that online marketing firm Pigsback.com has raised EUR1.25 million in funds. The fundraising is made up of new funds and the conversion of shareholder loans. Chief Executive Michael Dwyer said: "This funding has been an important tidy up and enables us to keep moving forward with confidence. All of our business units are operating profitably and having endured two years of financial challenge we are now guardedly optimistic about our growth and profit prospects."
The paper also says that a year after the Government said social welfare recipients should produce photo ID because it was losing millions in fraudulent claims, it is planning to let claimants 'sign on' by text. The Department for Social Protection has awarded a EUR1 million contract to Hewlett Packard to "develop and support a mobile phone-based solution for dynamic selection of and self-certification by claimants of unemployment benefits". The Government said cost savings would be made by reducing the effort required to certify jobseekers at local social welfare offices. However, Fine Gael's social and family affairs spokeswoman Olwyn Enright said the proposed scheme left "huge room" for fraud.
According to the Wall Street Journal, Lenovo has swung to a fiscal fourth-quarter net profit. The Chinese PC maker said consumer demand for PCs remains robust and it is seeing signs that corporate demand for PCs is picking up. However, it also warned that margins may be under pressure due to its shift to low-priced PCs. Net profit for the three months ended 31 March was USD13 million, compared with a net loss of USD264 million a year earlier. Revenue rose 56 percent to USD4.32 billion.
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