Group Chief Executive’s Review
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Connecting with shareholders
It gives me great pleasure to see eircom reconnecting with a wide shareholder base following our return to the market in March of this year.
When I joined eircom in January 2002 the company had just been taken private as a consequence of the global downturn in telecoms.
One of my first public statements regarding the company’s future at that time, reflected my belief that, as Ireland’s national telecom’s provider, eircom should return to the market at the earliest possible opportunity.
Our success in achieving that objective in just over two years is the result of a well executed strategy which transformed eircom and delivered significant financial and operational improvements by focusing on the company’s core business, driving efficiency and enhancing its customer offerings.
I particularly want to acknowledge the role of our staff in the transformation. eircom’s success in a competitive marketplace depends on the commitment of the people who work in eircom. Their commitment is enhanced by eircom's unique shareholding structure through which the employees own 29% of the company. During a period of rapid downsizing, restructuring and focused management the contribution of the employees has been outstanding.
This transformation sees the company in good health today.
eircom is Ireland’s national telecommunications provider: we provide telephone service to every part of Ireland; we have 1.6 million fixed telephone lines; we carry over 13 billion minutes of voice and data traffic across our network each year and we have enabled one million broadband lines throughout Ireland in the past two years.
For our customers this means they can rely on eircom to provide maximum choice and excellent value one of Europe’s most liberalised markets.
The financial performance is robust. In the fiscal year 31 March 2004, we have delivered a very solid set results both financially and operationally. We have grown our EBITDA by 9% and our operating profit 39% and achieved real momentum in our broadband customer base which at the end of May 2004 exceeded 50,000. Broadband represents our biggest opportunity for growth and is at the centre of eircom's strategy.
While the company is well-positioned as a focused telecoms provider with real performance momentum, I am determined that our strategy be disciplined and clearly articulated.
Our goal is to create shareholder value. We will reduce costs further, recognising the global-wide trends in fixed telecoms; maintain our market position by offering good value and good services to customers; accelerate growth in broadband building on the current momentum; and enter mobile telephony when a commercially viable option emerges.
We can achieve our commercial ambitions. We have the people and the technology to succeed, but we also require a supportive regulatory regime.
We recognise the strategic importance of the telecommunications sector to the Irish economy, but as commercial company with shareholder responsibilities our objectives will not always align with national aspirations. The challenge, in my view, is for the industry, government and the regulator to work together and agree policies which incentivise and support investment in the next generation of networks to underpin the success of Ireland’s knowledge based economy. This is of crucial importance to the long-term health of the sector and all of its stakeholders.
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