Davy Stockbrokers has predicted that Eircom stands to benefit from communications regulator ComReg's plans to trigger more competition in the Irish mobile phone market.
ComReg said on Thursday it was planning to open the networks of Vodafone and O2 to outside competition in a bid to give better value to consumers.
In a note on Friday, Davy analyst Jack Gorman said it had proven difficult for Eircom to re-enter the mobile market so far through an MVNO (mobile virtual network operator) deal. An MVNO piggybacks on an existing network to offer mobile services.
Gorman said that if Eircom captured a 10% share of the market - as had happened with MVNOs in other countries - and prices fell by 25%, this would equate to revenues of around €150m.
The analyst said this would add 9% to Davy's existing forecasts for Eircom. But he pointed out that this understated the potential impact, as an MVNO presence would also enable Eircom to manage the switch from fixed to mobile phones more effectively.
