Irish telecommunications operator Eircom PLC said Monday its board has unanimously recommended the demerger and sale of its mobile phone operation, to be called Eircell 2000 PLC, to Vodafone Group PLC. Eircom has also outlined how it plans to move forward as a company should the sale be approved by its shareholders.
Vodafone announced its intention to buy Eircell for 4.5 billion euros (US$4.06 billion) last December. The vote by Eircom shareholders to approve or reject the deal will take place on May 11, Eircom said in a statement. At the same time, shareholders will be asked to approve the demerger of Eircell from Eircom to a new company called Eircell 2000, the company said.
Should the sale become finalized, Eircom plans to consolidate its business around its core fixed line operations and focus its efforts on providing fixed line voice, data and Internet communications services in Ireland, the company said.
In addition, Eircom has decided to delay the roll out of its DSL (digital subscriber line) services until after September, sometime during the second half of its new financial year ending March 31, 2002, the company said.
Furthermore, the company will abandon it plans for a DSL-based TV and entertainment service and will drop its Internet software and content development investments, Eircom said.
Eircom added that it expects earnings before interest, tax, depreciation and amortization (EBITDA) for its financial year ending March 31, to be 640 million euros on revenue of 2.1 billion euros. The company has recently axed 700 jobs in an effort to restructure and will lay off a total of 3,500 people by 2003, the company said.