Weekly Digest
Weekly Digest Issue No. 518
03-06-2010
by Emmet Cole
Telco report prompts Eircom breakup call | A week in the life of Facebook
Revenue, earnings drop at Eircom
It's been quite the week for Eircom, which saw third quarter sales to the end of March 2010 fall 7 percent year-on-year to EUR455 million. The company's earnings before interest, tax, depreciation and amortisation (EBITDA) declined 4 percent to EUR170 million. Fixed-line sales fell by 7 percent to just over EUR356 million, as the number of fixed-line customer numbers dropped by 15,000 during the quarter (75,000 during the past nine months) to 1.49 million. Meanwhile, mobile revenues fell 5 percent to EUR112 million, as it lost 21,000 mobile customers over the period.
Eircom has plans to shed 1,200 jobs by next March, but hinted that it intends to accelerate that process in light of the latest figures. The company has already cut 894 jobs out of the 1,200. The Examiner reported on Thursday that Eircom is set to take on corporate financial advisers over the next month or so to help it reach a decision on its long-term financial strategy.
Meanwhile, Eircom customers are set to see their phone bills increase by an average of 3 percent from July when a new pricing structure is implemented. From 1 July, calls that exceed the terms of a customer's bundle will be rounded up to the next minute, rather than the current per-second billing.
Telco report prompts Eircom breakup call
In related news, ALTO (Alternative Operators in the Communications Market) called for the breakup of Eircom into two separate arms (wholesale and retail) again, on the back of a survey of telecoms regulation in Europe conducted by the European Competitive Telecommunications Association (ECTA). The survey scored Ireland sixth out of 22 nations but also described the country as "generally weaker on the resulting regulatory and market outcomes".
The scorecard also noted that mobile broadband use in Ireland is twice the European average, due to its cheaper cost, but also that mobile broadband speeds tend to be much slower than those provided by fixed-line broadband services.
ALTO is now calling on ComReg to split Eircom into separate wholesale and retail arms, claiming that such a move would further diversify the market, leading to reduced prices and better services.
"We are urging that the new EU communications framework be transposed into law immediately and that ComReg uses the power it grants to functionally separate Eircom," said Ronan Lupton chairman of ALTO, Ireland's member of ECTA, who also called for more investment in infrastructure.
"If the government is serious about attracting FDI and encouraging indigenous technology enterprises they must move on Eircom's monopoly," he said.
Mixed week on the jobs front
The jobs market continued on its rollercoaster ride this week. On Monday, AXA announced 200 new jobs for Dublin on Monday, with the establishment of a global life-product distribution and servicing subsidiary in the city. The jobs include roles in information technology.
And on Tuesday, the Minister for Enterprise, Trade and Innovation, Batt O'Keeffe, announced 55 jobs in two firms in Tralee Technology Park, Co Kerry. Straker, a high-tech website localisation firm, will establish its European headquarters in Tralee, creating 25 jobs. Meanwhile, wind turbine manufacturer Enercon, which employs more than 12,000 workers worldwide, is to create 30 jobs via a technical services operation.
On Wednesday, O'Keeffe launched the European headquarters in Dublin of AMPAC-ISP -- a global, space technology firm that manufactures components for the aerospace industry. The company's space technology development and manufacturing centre in Dublin will develop and build rocket engine components. AMPAC-ISP employs 30 workers in Ballycoolin, Dublin, and 65 in Europe.
Less positive was news that Hewlett-Packard has plans to shed a total 3,000 of its global workforce over the coming years -- it will reportedly cut 9,000 jobs and create 6,000 new ones. The company employs 4,000 people in Ireland, but reports suggest that the restructuring is not expected to affect its Irish workforce. In May, Hewlett-Packard announced plans to outsource 140 of its staff to Galway-based electronics company Celestica from June. Staff will remain located at HP's technology campus in Leixlip, Co Kildare.
iPad hits 2-million milestone
Apple has sold 2 million iPads since the device launched at the beginning of April, the company announced on Tuesday. Apple did not detail the number of sales by country or model. These sales figures place the iPad between the original iPhone (which took more than two months to reach 1 million in sales) and the iPhone 3G (which sold about 3 million units in the first month after its release.)
Meanwhile, the Computex Taipei trade show is anticipating demonstrations of several low-cost iPad rivals, including ASUS' Eee Pad EP101TC and EP121 tablets. The latter device has a 12-inch screen, Intel Core Duo processor and runs Windows 7 Home Premium operating system. The EP101TC is more like a netbook, with a 10-inch screen, running Windows Embedded Compact 7 OS. LG is also getting in on the action with its LG UX10 tablet, which offers a webcam, Windows 7 Home Premium, SD card slot and micro-HDMI output.
Although time will tell, it seems unlikely that Apple will find itself up the creek without an iPaddle as a result of this increased competition. The iPad's solid popularity and the all-important first-mover advantage in the tablet segment bodes well for Apple's dominance of this particular market.
Meanwhile, Dublin-based company WorldNet has developed software that enables developers to add credit card payment capabilities to their iPhone apps. iPay for the iPhone allows credit card payments to be embedded in iPhone applications. It also enables payments to be processed by merchants' existing card acquiring bank, without having to go via the Apple payment infrastructure.
A week in the life of Facebook
Monday's "Quit Facebook Day" campaign didn't quite capture the popular imagination, collecting a paltry 34,000+ pledges by Facebook account holders to drop the social networking site -- that's an estimated 0.00637 percent of the social networking site's more than 540 million users. Founded by technologist Joseph Dee and systems designer Matthew Milan, the campaign was initiated to protest against Facebook's privacy controls.
Meanwhile, Facebook users have been hit by a so-called "clickjacking" virus. Luring victims with intriguing headlines like: "LOL This girl gets OWNED after a POLICE OFFICER reads her STATUS MESSAGE," the links direct careless users to a page containing a virus.
Pakistan lifted its Facebook ban this week after blocking the site for almost two weeks. Pakistani officials were angered by a Facebook page that encouraged users to post images of the Prophet Muhammad. Depictions of the prophet are regarded as blasphemous by many Muslims. Facebook has not removed the page, but has blocked Pakistani users from accessing it.
Finally, Labour MEP Nessa Childers labelled sites like Facebook as addictive and hazardous to mental health this week, and called for intervention and regulation by the EU. Childers -- a psychotherapist -- claims that Facebook is a threat to public health in Europe with more and more people living 'virtual' lives instead of 'real' ones. Unlike online personas, Childers claims people in real life "have bad breath and smelly feet."
Caped Koala Studios has built a virtual world for kids, combining education and social networking 