Telecom Eireann shares found support from US investors, trading strongly on Wall Street to close last night up almost 21 per cent. The US close should help keep the shares firm on European markets today.
Meanwhile, Telecom's chief executive, Mr Alfie Kane, who was in New York to see the shares make their debut on the market, has warned that the company is facing strong competition, loss of market share and continuous price reductions. He said Telecom would target the British market initially as it sought to boost revenues and grow the company.
Telecom's shares got off to a healthy start on Wall Street, rising by nearly 20 per cent to more than $19 (€18.67) in early trading on the New York Stock Exchange, as firm institutional interest and good general demand for the sector lent support to the fledgling issue. The Telecom ADRs closed last night at $19.3125. The ADRs - or American Depository Receipts - equate to four Telecom Eireann shares, so the Wall Street close last night was equal to a price of just under £3.74 (€4.74).
The Minister for Public Enterprise, Ms O'Rourke said there had been "a huge wave of enthusiasm" for the shares. "It's early days yet but we are satisfied. We will watch it as it goes," she said after ringing the bell to mark the company's debut on Wall Street.
The company has also listed on the Dublin and London stock exchanges.
"We couldn't have hoped for a better start," said one of the financial advisers to the flotation.
"It is important we develop new revenue streams," Mr Kane said yesterday. He said the company's focus initially was on the British market where it was interested in opportunities in areas such as data and multimedia.
Telecom is facing increasing competition in the Irish market and has established operations in Northern Ireland and Britain in an effort to find new income streams. As well as building up business in Britain and Ireland, it will seek to develop through acquisition.
Two-thirds of the company's outbound calls go to Britain while Britain's second largest traffic route is back to Ireland and the company is keen to secure that business through modest bolt-on acquisitions while it is also interested in expanding into the US.
The company has signed heads of agreement with KPN, a major shareholder in the company through holding company Comsource, regarding ongoing strategic development. It will also be looking at areas such as equity joint ventures. Mr Kane said that, following the sale of Cablelink, Telecom would be in a cash positive position and that future acquisitions would be cash rather than paperdriven.
Ms O'Rourke described the Telecom listing as a "turning point in history" although she said she did not have a list of companies she was working through with a view to privatisation.
"I don't have an agenda with a page in a copybook where I put a tick that that is satisfactory and now we will start again with number two," Ms O'Rourke said. "Such strategies take time and work and planning and are not something to go into lightly."
