The CEO of Irish broadband and phone company Magnet Networks has criticised the 3.1% price hike recently announced by incumbent Eircom as “outrageous” spin.
According to Mark Kellett, the average increase figure forecasted by Eircom on 10 February is…
The CEO of Irish broadband and phone company Magnet Networks has criticised the 3.1% price hike recently announced by incumbent Eircom as “outrageous” spin.
According to Mark Kellett, the average increase figure forecasted by Eircom on 10 February is designed to cover up the real costs to Irish consumers and businesses.
Kellett said: “The 3.1% average increase figure used by Eircom is an outrageous piece of spin and is being used to hide much more severe price hikes. Dig a little deeper and the real costs are laid bare.
“Call connection fees will increase by 60%. A one-minute local call made during peak times will increase 30% and off-peak the increase is 29%. These rises are exorbitant to say the least and not something that can be glossed over. Where the 3.1% figure came from is a mystery.”
When announcing the price changes, Eircom insisted that broadband, line rental and bundle subscription prices will remain unaffected.
However, Kellett also pointed to “approximately 330,000 customers [who] are not part of a bundled offering and thus will be affected by the increased charges”.
Eircom, which declined to comment, is due to update markets on 1 March on the progress of a strategic review of its debt.
Gleacher Shacklock and JPMorgan are advising the group on options – ranging from a restructuring, debt swap or rights issue – to prevent the group from breaching financial covenants within the coming 12 months.
