By any objective criteria, the flotation of Telecom has been an outstanding success. A large proportion of the population - some 574,000 in all - opted to purchase a stake in the company. The Government appears to have pitched the flotation price (£3.07) at precisely the right level; anything less and it would have been vulnerable to the charge that the company was being sold off too cheaply. Best of all, Telecom is performing strongly on the market with investors reaping an instant gain of around 20 per cent. Some questions have been raised about Telecom's longer-term capacity to generate greater profits in an increasingly competitive market and this will be the main challenge facing management. For all that, there are few signs of any falling away in the share price over the medium term; buoyed up by market confidence about a possible takeover, most fund managers are taking an optimistic view of Telecom's prospects. In all of this, the Government and its advisers deserve some credit; the hasty departure of Mr Brian Thompson as chairman four months ago, after a potential conflict of interest became known, raised doubts about the flotation; but the installation of Mr Ray MacSharry as his successor - and, it must be acknowledged, a very skilful marketing campaign - restored public confidence. Telecom management also deserves some commendation; in advance of flotation it did a good job in cutting the company cost base and exploiting the boom in services such as data communication and the internet.
Given the response to the Telecom flotation, it scarcely seems credible that privatisation was a dirty word in political circles only a very short time ago. During its period in office, the rainbow government was happy to reassure the powerful public service unions that the State would retain control of all major companies - even when it was not clear that this was in the companies' wider interests. Fianna Fail has also been too sceptical, for far too long, about the whole process of privatisation - even if it now in Government has something of the zeal of the convert about it.
For all that, the decision to sell off Telecom was a relatively easy one, since the State has no business in the telecommunications industry. Some State companies could clearly benefit from being freed from the shackles of day-to-day control from a Government department. There seems no compelling reason why, for example, Aer Lingus or Aer Rianta should not be sold off. Others desperately need a healthy dose of competition to shake them out of their stupor. The situation is less straightforward when it comes to public utilities like the ESB: the experience in Britain and Northern Ireland is that privatisation in some public utilities has raised prices and actually lessened competition. After the success of the Telecom flotation, it is now time for the Government to take stock; to begin a detailed debate on the future of the State companies and to decide on a case-by-case basis what is best for the State, for the public and, not least, for the companies themselves.