Two leading businessmen have called on the Government to consider buying eircom back, rather than allowing a strategic state asset to fall into private hands with the Tony O Reilly led Valentia consortium.
John Nagle, chief executive of Alphyra, formerly ITG, said the sale was 'outrageous'.
He said it was 'nuts' for the Government to allow national infrastructure to fall into private hands. 'I think the Government should have bought eircom back', he said.
'The consortium is buying a cash cow, a brilliant business, which in commercial terms will have a monopoly of the state infrastrucure, and they're going to sweat it - we're going to lose out as a nation,' he said.
John Nagle said that what is needed now is a national infrastructure to sustain growth for the next ten to 15 years. He said eircom and other telecoms companies were pulling their capital expenditure and in five years Ireland will have an outdated infrastrucure which will not be able to compete.
Chris Horn, chairman of Iona Technologies, who has criticised the deal as the 'sale of a crown jewel', said this was an 'intriguing idea which could be considered'.
While the eircom board is recommending the sale of the fixed line business to Valentia the buyers must circulate a document on the terms by next Monday, and after that any other bidder could enter the field for a period of about three months.
Into the bargain eircom can walk away from the Valentia deal if anyone offers over 135 cents per share.
Speaking to RTE, Chris Horn said that this is the sale of a crown jewel and he said questions must be raised about the implications for the national telecoms infrastructure.
Dr Horns wonders if it will be a 'cash generating vehicle for the new owners as opposed to a strategic asset which will help the development of the economy in the future.'
He said the experience from other countries is that the assets bought privately are used to deliver profitable returns and re-investment is only considered if it can add extra profits.
He said that a buy-back by the state could be considered along with other ideas and 'if there are tough decisions to be made, then let's make them. We should be forward looking rather than worried about what we did or didn't do yesterday.'
