Eir will see a drop in market share, Fitch says

According to rating agency Fitch, EIR will see average revenue per user and a drop in market share this year as it is targeted by competitors.

A report issued by the agency tonight said Eir’s increased marketing and customer acquisition costs are likely to increase the group’s earnings before interest, taxes, depreciation and amortization (EBITDA) by “around 1.5 percent” this year compared to 2021. will decrease.

“Price competition for new subscribers has been aggressive in both the fixed and mobile markets and is likely to continue,” notes Fitch.

The agency has downgraded secured debt instruments issued by Luxembourg-based Eircom Finco and Dublin-based Eircom Finance from ‘BB’ to ‘BB-‘ and removed them from Rating Watch Negative.

Eir, whose managing director is Oliver Loomes, is majority-owned by French billionaire Xavier Neil through his Iliad group. Two US hedge funds also own shares in the Irish telecommunications company.

His companies have collected almost €900 million in dividends from Eir since they first invested in the company in 2018.

“The downgrade reflects our view that recovery prospects for Eir’s senior secured instruments raised at the two financial firms are weaker following the sale of a large minority stake in Fiber Networks Ireland (FNI) and the issuance of new secured debt at FNI,” he told Fitch in his report tonight.

Earlier this year, Eir sold a nearly 50% stake in its wholesale fiber network to French private equity group InfraVia.

“Rating oversight has been removed to provide more transparency about Eir’s debt buyback plans and the amount of debt that will remain outside of FNI,” Fitch added.

The rating agency noted that Eir’s plans to roll out 1.9 million buildings with fiber to the home (FTTH) by the end of 2026 were about halfway through by September 2022.

That means 200,000 sites will be added in 2022 and up to 250,000 buildings will be handed over in 2023, Fitch added.

“This represents a significant increase in pace over the 177,000 homes built in 2021,” the report said. “While this may offer some protection against future fixed-line migration, competition for high ARPU subscribers will remain fierce after Virgin Media Ireland (952,000 sites by 2025) and SIRO (up to 700,000 sites) ramp up investments in high-speed broadband). ”

https://www.independent.ie/business/eir-will-see-market-share-decline-says-fitch-42186363.html Eir will see a drop in market share, Fitch says

Fry Electronics Team

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