UPC says State should not buy Eircom

THE HEAD of one of Ireland’s biggest broadband providers said yesterday that debt-laden Eircom,which is up for sale, should not be nationalised by the Government.

Speaking yesterday morning at a breakfast hosted by the Dublin Chamber of Commerce, Robert Dunn, chief executive of UPC Ireland, which operates NTL and Chorus, said such a move would “distort” the telecoms market and be bad for the economy.

“Putting it [Eircom] inside the Government would be a mistake overall and lead to a distortion of the market,” Mr Dunn said. “The Irish taxpayer has been put under a considerable burden already and I would question and doubt the need to extend that burden. The economy does need a vibrant incumbent but I personally believe that company should exist and be supported in the private sector.”

UPC is in the final stages of a €1 billion upgrade of its cable infrastructure in the Republic that will allow it to offer a so-called “triple-play” of services – television, phone and broadband – to homes and businesses.

UPC had 102,000 broadband customers at the end of 2008, making it the second-biggest provider behind Eircom. The figure is now thought to be close to 110,000. This represents about 9 per cent of the Irish broadband market.

UPC also has 27,800 customers using its phone service – a figure that doubled in 2008.

Mr Dunn’s comments come in the wake of calls for the Government to consider nationalising Eircom, which has debts of close to €4 billion and is for sale, having severed its ties with Australian investment group Babcock Brown.

This agenda has been pushed by Eircom’s trade unions on the basis that its network is vital to the future growth and health of the economy.

Eircom controls more than 70 per cent of the fixed-line market and is the biggest provider of broadband. It also owns the Meteor mobile phone business.

Mr Dunn said that, within 12 months, UPC would be able to offer residential and corporate broadband customers bandwidth of 120Mbits/sec. Services at this speed are not currently available to residential customers and he said the service would be at lower prices than currently charged.

UPC’s triple-play offering is available to about 500,000 homes, he added. Mr Dunn said UPC intended to launch a campaign in May offering its digital-plus set-top box (which has a built-in digital video recorder) and triple-play service for just €49 a month.