Mobile phone operator Esat Digifone has moved into profit and announced the appointment of a new chief executive on the same day its parent, British Telecom, announced its breakup and a record rights issue. Ms Danutta Gray, currently working with British Telecom owned German mobile operator Viag Interkom, will assume the position from June 1st.
News of her appointment came as British Telecom (BT) released financial results yesterday, which provided a detailed description of its Irish subsidiaries. The results show Digifone made an operating profit of £20 million (#25 million) in the year to the end of March last against a loss of £27.5 million a year earlier, while Esat Telecom recorded a loss of £48 million.
The Digifone figures were a glimmer of light in a day of gloom for the company, which reported its first annual loss since it was privatised 17 years ago - losing £1.03 billion sterling (#1.66 million) compared with profits of £2.94 billion a year earlier. It blamed a £3 billion charge taken on the Viag operations.
BT said it would hive off its mobile telephony business, creating two separately listed companies - Future BT, focusing on its European network and retail business, and BTWireless for its mobile interests, including Esat Digifone.
BT also announced a £5.9 billion sterling rights issue - the biggest in British history - at a cut-price level of £3 per share, a discount of 47 per cent from the previous day's closing price.
The former state monopoly is struggling to plug a hole in its balance sheet of almost £30 billion after embarking on a spending binge on next-generation mobile assets and licences as it scrambled to keep pace with the likes of arch-rival Vodafone.
