Smart Telecom
 | |
| Private | |
| Industry | Telecom |
| Founded | 2000 |
| Headquarters | Dublin, Ireland |
Area served | Ireland |
Key people | Brendan Murtagh, John Riordan |
| Products | broadband, landline |
| Revenue |
 €45.6 million (2005) |
 -€19.436 million (2005) | |
Number of employees | 25 |
| Website | http://www.smarttelecom.ie/ |
Smart Telecom (AIM:SMR) is an Irish telecom operator that started as a phone card seller. It is also the third largest provider of cost-sensitive telecom services sector in Ireland, behind the incumbent operator Eircom and BT Ireland. It currently has an estimated 50,000 land-line customers and 18,000 broadband subscribers. Smart operates several services:
- Point-to-Point, Transparent LAN Services and Telephony services across a Resilient Packet Ring backbone
- Payphones (to 2006)
- Broadband Internet Access
- FTTH/IPTV services
- Point-to-point Licensed Microwave radio links
Backbone services are available to users in parts of Dublin, Cork, Dundalk, Limerick, Letterkenny, Galway, Sligo, Waterford, Wexford, Portlaoise, Mullingar, Carlow, Cavan, Drogheda, Killarney, Tralee and Clonmel.
Broadband service
At the end of Q 1, 2006 there were 322,000 broadband subscribers in Ireland, 35% of internet subscription. Broadband accounted for 19% of all internet subscriptions.[1]
Recent history
Smart was also a bidder for the Irish mobile operator Meteor following the decision of its parent company to sell all international mobile operators; however on July 21, 2005 it was announced Smart Telecom had withdrawn, leaving the company to be bought by Eircom, the largest telecoms operator in Ireland, and owner of the local loop throughout the entire country.
On November 18, 2005 Smart Mobile was offered the country's fourth 3G mobile phone network licence on November 16, 2005.[2] Vodafone Ireland, O2 Ireland and 3 Ireland already had secured a 3G mobile phone network licence. Acceptance of the licence would require Smart Mobile to launch its services by April 30, 2007, with 33 percent demographic coverage by October 31, 2009 and 53 percent coverage by 2011.
The 3G spectrum access fee at €114.3 million, with an annual spectrum fee of €2.2 million and an administrative fee of up to €300,000 a year. Taking on a 3G licence would require substantial capital investment by Smart.
On November 9, 2005 Smart Telecom announced that it had raised €55.2 million in new funding. This involved a placing of new ordinary shares at a price of €0.20 per share and a debt equity conversion of €10.8 million.
But this licence was withdrawn in February 2006 by Comreg due to a failure by Smart to provide a €100 million performance guarantee bond in a form acceptable to it within the specified deadline. There was a significant drop in the companies share price subsequently. Smart is appealing the decision.
Smart Holdings Ltd lost a bid for to sponsor the weather forecast on RTÉ to Glanbia on April 7, 2006. The High Court ruled that its referential bid - based on a formula equivalent to the highest bid received +5% was not valid because RTÉ terms of offer did not permit this.[3]
e-Nvi takeover and MPEG-4 headend
In September 2007, Smart announced[4] their takeover of e-Nvi, a Dublin-based Triple play provider. It also announced that it was investing in an MPEG-4 headend for its own Triple play service; the vendor was confirmed[5] as Thomson.net in October 2007.
Problems in 2006
Having head-hunted 49 managers from Eircom to promote and market broadband door-to-door, some as recently as five months earlier, the Chief Executive of Smart Telecom, Oisin Fanning fired 26 of them abruptly on August 31, 2006. This took place in the context of unmet sales targets of 64,000 sign-ups, aggravated by Smart being unable to get its equipment into many Eircom exchanges which meant that Smart had no product to sell in many parts of Ireland.[6]
Smart Telecom (SMR.L) shares traded at 9c in early September 2006, less than two thirds of their floatation price. Sales for 2006 are anticipated to reach €60 million - up from €45 million in 2005. However losses of €23 million in 2005 are anticipated to be eclipsed by losses of €35 million in 2006.
Future prospects will be defined by the achievement of substantial growth in broadband sales volume and eliminating losses, heralded promises which stakeholders, including Seán Quinn, have been waiting patiently to emerge.
Chief executive resigns
Oisin Fanning, chief executive resigned from this position on September 9, 2006 on health grounds. Further senior resignations are pending. The acting chief executive, Ciaran Casey, is to carry out an in-depth financial review of the company as a further investment of €30 million is sought.[7]
The chairman of the company, Raymond Kings, has stated that Brendan Murtagh, the largest shareholder in the company will continue to provide short-term working capital while longer term funding options are being investigated.
Divesting non-core businesses
Details of a strategic review, published on September 22, 2006 mean that the employee cohort will be cut from 348 to c100, additional loan funding is to be provided by major shareholders and the company will divest its payphone and pre-paid call card businesses so as to focus on its corporate and residential broadband businesses.[8]
Revenue in the six months to the end of June 30, 2006 dropped 15% to €20.3 million. There was a 61% increase in administrative costs leading to a loss, before exceptional items, of €17.9 million and an operating loss up to €31 million.
Eircom's termination of service
On October 2, 2006 Eircom, owed €4m by Smart, including arrears of €1.7m, ceased providing wholesale services to Smart Telecom. The result is that the majority of Smart Telecom's customers could not make outgoing calls (except for emergency numbers). According to RTÉ news[9] at the time almost 45,000 customer voice lines were cut off, and Eircom was in the process of disconnecting approximately 17,000 broadband customers. Smart issued a notice on their website stating that full service would be restored as soon as possible but declined to give any date for such a restoration.
Shortly afterward, Communications Minister Noel Dempsey called on Eircom to reconnect a full telephone service to Smart customers.
Comreg has announced an interim measure where phone lines to Smart customers will be reconnected and they will be given the option to join other providers.
Resolution
It was revealed on Friday, 6 October 2006 that BidCo, a company controlled by Brendan Murtagh, its largest shareholder, will purchase all of the company's assets, and will also take on its estimate €40m debt.[10] This will also reportedly allow broadband service to be restored immediately. It has been confirmed Smart will dispose of the "calls only" packages, but will continue to provide call services to broadband customers.
In an email to customers on the same day, restoration of telephone and broadband services was announced along with a free upgrade of 3 Mbit/s to all broadband customers for the remainder of 2006 as a token of their appreciation.
Problems in 2009
Smart Telecom Examinership August 2009
Smart Telecom entered examinership in August 2009 with an internal examiner reviewing their debts revenue and business structure. Smart Telecom are currently in debts of up to €70 million to creditors and in. loans.
It is said that Smart have a fair chance of coming out of examinership but also have 2 new investors that would be willing to invest in the company.
Smart Telecom are continuing operations as normal with no effects to any of its customers.
Digiweb Purchase
As of November 2009, the Irish broadband supplier Digiweb have announced their intention to purchase Smart.[11]
References
- ↑ "ComReg 2006 Q1 Report Shows continuing growth in broadband uptake" (PDF). Retrieved 2006-09-03.
- ↑ "Smart Telecom offered fourth 3G licence". ElectricNews. 2005-11-16.
- ↑ "Smart loses weather forecast case". The Irish Times. 2006-05-27.
- ↑ Smart Telecom acquires Envi, invest in triple play IPTV
- ↑ Light Reading Europe - Services Software - Thomson Wins Irish IPTV Deal - Telecom News Wire
- ↑ O'Neill, Sean; Hamilton, Fiona (2006-09-03). "Get Smart". London: The Sunday Times. C1 control character in
|last1=at position 3 (help) - ↑ "Fanning to step down from troubled Smart". 2006-09-09.
- ↑ "Ireland's Smart Telecom slashes jobs". Reuters. 2006-09-22.
- ↑ RTE.ie
- ↑ Smart Telecom to be privatised - From RTÉ business.
- ↑ Smart Telecom to exit Examinership through investment from Digweb