THE STRUCTURAL separation of Eircom into two or more separate entities may not be desirable but the reality of the financial markets and the size of the company's debt may make it the only practical option, according to the alternative telecoms lobby group, Alto.
Speaking at a telecoms industry event in London yesterday, Alto chairman Liam O'Halloran signalled that Eircom's competitors are taking a more "pragmatic approach" to Babcock & Brown's plans for former incumbent telco.
The Australian investors are seeking a full structural separation of Eircom into a "NetCo" which would control both its core and access networks and a "ServeCo" which would have access to the network on the same basis as other telcos. It is understood that Eircom would plan to sell ServeCo in order to reduce its €3.8 billion debt. "We would still prefer to have a functional separation model, because it is not making much new ground," Mr O'Halloran told The Irish Times.
"But that said, you have to accept the reality of the markets at the moment. It would be better something is done rather than nothing."
Alto's main concern is that post-separation all operators would have access to Eircom's network on the same terms, Mr O'Halloran said. Functional rather than structural separation has been introduced in the UK where BT Retail has access to Openreach's access network on the same basis as other operators.
Babcock & Brown favours structural separation which would create a highly regulated NetCo because as an effective infrastructure monopoly it would be valued higher but also have certainty over future revenues.
Separately, it has emerged that the Republic now has more than five million active mobile phone subscriptions - equivalent to 117 per cent of the population.
New data released by communications regulator ComReg yesterday showed that in the fourth quarter of last year the sector generated revenues of €1.14 billion, which brought total turnover for 2007 to €4.56 billion.
The total number of broadband subscribers at the end of December was 886,300, up 11.6 per cent from the previous quarter. DSL, broadband delivered over fixed phone lines, is the most commonly used technology, with 549,600 subscribers, an increase of 45 per cent during 2007. Mobile broadband services, based on 3G networks operated by Vodafone, O2 and 3 Ireland, now represent the second most popular broadband technology, with 127,500 subscribers.
