In many respects the results from Telecom Eireann announced yesterday could hardly be more impressive: the company has managed to reduce its debt by no less than £159 million, while turnover at over £1 billion has surged to record levels. Growth in many areas, notably mobile phones, has been spectacular and Telecom has also finally managed to deliver lower prices for both business and residential customers. It is, of course, the case that the commercial environment could scarcely have been better for the company, with buoyant demand in the marketplace and interest rates at historically low levels. But that should not detract from the view, voiced by the company chairman, Mr Ron Bolger, that Telecom is making "good progress" in repositioning itself for the future.
There is, of course, a great deal of work to be done. Although the company has worked well to rein in its debt, it is still saddled with a debt burden of over £700 million - and it needs to invest massively in equipment to provide the sophisticated range of services which industry now demands. The company is now in a period of painful transition from a cosy monopoly to one which will shortly have to find its in a much more competitive commercial environment. Deregulation of the Irish telecom market is looming, but the company still has much to do to meet this challenge.
Telecom remains overstaffed and its products - even allowing for the reductions in call charges remain overpriced. The continuing problems with the cellular network also serve to underline how the company's level of service to its customers is uneven and unpredictable.
In mitigation, it must be acknowledged that Telecom has not been well served by its political masters. The long drawn out process of securing a strategic partner, as both this Government and the previous administration dithered and dallied, did not help matters. And the company has not always been given coherent political direction.
It is to be hoped nonetheless that the latest strong results will strengthen the company's hand as it moves into the decisive phase of negotiations on a strategic alliance with the sole remaining bidders for a 35 per stake in Telecom: the KPN/Telia consortium, representing Dutch and Swedish companies respectively and the Danish national operator, TeleDanmark. The expectation is that the Government will now receive about £300 million to £350 million from the sale, somewhat less than the £500 million originally envisaged but much better than the more pessimistic estimates made by some commentators.
In their own way, these calculations provide a crude means of measuring the company's performance: Telecom Eireann has made impressive strides but there is still some distance to travel. On the basis of the latest results, the company's Strategic Business Review, which began last year, has helped to steady the ship but there is, clearly, a continuing need to cut costs and to ease the debt burden.