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Ireland's Eircom - Meteoric Rise Coming to an End?
Meteor is Ireland's third largest mobile operator. Its financial performance is, arguably, the sole bright spot in the Q1 report of eircom, its parent company. Heavily burdened by debt, eircom is losing fixed line traffic at an alarming rate. Over the last year, retail voice traffic has dropped by 10% and overall traffic by 13%. Almost every aspect of the fixed business has seen lower revenues and this has led through to lower EBITDA.
Compared to the March 08 quarter, revenues are down from EUR 414m to EUR 387m and EBITDA from EUR 148m to EUR 141m.
Meteor, by contrast, has increased its subscriber base and improved profitability and much is made of its achievements in management.s presentation to investors. The company aimed to obtain a 20% share of the Irish market, measured by subscriber numbers. It now has slightly more than 20% of the voice market (20.9%) and just under 20% (19.6%) of the total market including mobile broadband devices. Meteor has just launched mobile broadband (in March 09) and sees this as a means of reviving its growth rate, which, as the chart suggests, has been flagging somewhat in recent quarters. This is reflected in the revenue number - down EUR 8m sequentially and EUR 3m year on year at EUR 117m - but not in the EBITDA line, which rose from EUR 31m to EUR 36m.
In absolute terms, Meteor now has a total of 1,024k customers, up from 975k one year earlier, but slightly below the Q4 08 total of 1,032k. ARPU is marginally down, year on year, at EUR 37.50 (EUR 39.80) - well below the level of spend reported by Vodafone and O2, Meteor.s larger rivals. The company expects to be able to continue building its share of the market and is hoping that a combination of improved 3G coverage, the launch of mobile broadband and a rebranding to eircom Mobile will help. We are not so sure about that last point as the eircom name is associated with high tariffs and poor service - not to mention a catastrophic IPO some while back, when large numbers of Irish private investors lost money in the shares.
Posted to the site on 9th June 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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