Eir is planning to sell-off almost half its fibre network in Ireland in a deal that could net the group over €1 billion.
The company, which is majority owned by French telecoms magnate Xavier Niel, plans to hive off its fibre business into a separate joint venture in which a potential buyer would take a 49 per cent stake.
It has appointed financial advisory firm Lazard to advise on a possible transaction and is understood to have sent out feelers to several potential buyers.
The telco is said to be looking for inward investment to speed up the roll-out of fibre across its network.
It is expected to retain control over the rollout of fibre; the delivery of services; and the maintenance of its network as part of any transaction.
A spokesman for Eir declined to comment.
The company, which was sold to Mr Niel and his Iliad telecoms business for €3.5 billion back in 2018, is spending about €500 million on a fibre-to-the-home network.
The Eir network currently passes 750,000 homes and businesses, including 340,000 originally earmarked for the National Broadband Plan (NBP). The aim is to extend this to 1.9 million over the next three years.
Spain's Telefonica and Telecom Italia have conducted similar transactions in recent years to pay for the cost of their fibre rollouts.
Minority stake
Eir, which employs 3,200 staff, uses a fixed-line network to serve its customers but also sells wholesale services to other telcos through its wholesale arm Open Eir.
Unlike most market incumbents, it has only a minority stake in the highly lucrative urban broadband market here, playing second fiddle to Virgin’s cable network.
Virgin has a 60 per cent market share in Dublin, while Eir has less than 30 per cent, a reflection of the underinvestment that followed the former semi-state’s privatisation in the late 1990s.
Privatisation saw ownership of the company change hands several times in the 2000s. It was forced into examinership in 2012 amid mounting debt.
In a recent interview with The Irish Times, chief executive Carolan Lennon said the company's new owners were "buyers, not sellers ... they make long-term strategic decisions".
She also insisted the company is investing more in its network than most of its international peers. Eir’s capital expenditure for the 2020 financial year – the money it invests into its own network, a key metric for telcos – was €250 million.
Since its controversial exit from the government’s NBP process in 2018, it has focused on winning back market share from Virgin with a major investment in fibre.
Like most incumbent telcos, it is replacing its traditional copper network with a fibre one – one that can cope with the increased demand for high-speed broadband. Some 250 million hours of Netflix were consumed on the Eir network last year alone. The company now ranks as one of the most profitable telcos in the world, generating an annual operating profit of about €600 million.
