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GIC Plans to Acquire Stakes in Eir

Singapore based investment company, GIC is looking to acquire stakes of Irish telecommunication operator Eircom (Eir). GIC is planning for a multimillion-dollar minority stake in Eir in a deal valuing the Eir at around €3.5 billion ($4 billion). Eir is a rapidly growing telecommunication operator, who has invested in building modern telecommunication infrastructure in Ireland. The Singaporean sovereign-wealth fund is now flexing its financial muscle to invest in Eir.

Eir said GIC intends to buy shares in the group worth up to €230 million at a price of €232 a share, from existing shareholders. However, the company authorities declined to add further detail on any potential final shareholding position for GIC, given the early-stage timeline of the sale process. The U.S hedge fund Anchorage Capital is the biggest shareholder of Eir and will remain even after GIC’s buying. Anchorage has more than 35% stake in Eir. Anchorage Capital welcomed GIC as a “new long-term shareholder” and said it looked forward to partnering with GIC on further “value creation opportunities”

Eir, which was a former state-owned monopolist is now a fixed, mobile and broadband telecommunications company in Ireland and is the largest telecommunications operator in the Republic. Eir has a division to service the business & corporate telecom markets in Northern Ireland and Britain. As Bord Telecom Éireann, the company was state-owned until 1999. Eir operates the fixed-line telephone network, an LTE (4G), HSDPA (3G) and GSM/EDGE (2.75G) mobile telephone network Meteor (acquired from AllTel (Western Wireless) in 2005) and acts as an internet service provider (ISP) as of now.

Eir deploys an amid or aerial and underground access solutions to provide broadband services to its subscribers. Eircom had 54% market share of fixed voice lines; 40% market share of fixed broadband; 11% of mobile broadband; and 17% of mobile. Eir’s main competitors are Virgin Media Ireland, Vodafone Ireland, Imagine Communications, Magnet Networks, and Smart Telecom. Virgin operates cable TV and broadband network in Ireland. Vodafone Ireland has bought a residential customer base from BT and is now accessing through Eir’s network and BT Ireland’s fibre networks.

Eir operates under license from the Commission for Communications Regulation. Most homes and businesses in the state are dependent on their network. A range of telecommunications services is provided on the network including Business IP, its MPLS platform. Eir have also completed a wholly-owned fibre network ring around Northern Ireland and another around Belfast. The ISP division Eir Net, provides dial-up services, as well as broadband services.

In a separate incident, Eir had expressed its dissatisfaction with using the ESB’s (utility company) network to roll out its new fibre broadband product and has told that the energy company’s stance could further delay the introduction of high-speed broadband to many parts of the country. ESB denied the claims made by Eir, but it shows the heightening of tensions between the two utilities ahead of the awarding of contracts for the National Broadband Plan (NBP), in which both companies are involved.

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