ComReg, the telecoms regulator, is seeking business consultants to examine a proposal from Eircom owner Babcock & Brown to split the network part of the telecoms group from its retail unit, a plan it is already characterising as "the Project".
Not long after Eircom submitted a proposal to the Government and the regulator, ComReg has announced that it aims to hire a number of consultants within weeks to conduct a detailed appraisal of the plan.
"We expect consultants to be appointed by December. In terms of when their work is to conclude, I can't say when at the moment. That has yet to be decided," said a spokeswoman for ComReg.
The regulator described the proposed structural separation of Eircom as "the Project" in an EU tender notice it filed two days ago. The notice said ComReg wanted to examine four aspects of the proposal: operational and regulatory issues; strategic issues; corporate finance issues; and economic and regulatory accounting issues.
While the Government has not yet made known its view of the proposal, Eircom is prepared to offer the Government a minority stake in its telecoms network in return for control over State-owned public broadband systems.
Such a move would represent the fifth change in ownership of the national phone network since thousands of private investors lost money in the privatisation of the company almost a decade ago.
However, after years of under-investment in the Eircom network, it would return the Government to a position in which it would have some say over the level of investment in the system.
Staff and former staff control 35 per cent of Eircom through an Employee Share Ownership Trust (Esot). The shareholder agreement between Babcock & Brown and the Esot anticipates a separation of the business, but it is not clear how they would divide their interests after a separation.
