Sir, - A once valuable and proud national asset is now toothless and the prey of bargain-basement hunters and asset strippers.
I could be predicting the fate of Aer Lingus, but instead I describe the actual condition of Eircom. Deregulation, stripped of its academic mystique, is simply a no-fuss way of converting social capital to private profit. One wonders who will take the blame for subscribing so faithfully and so blindly to Friedmanite and University of Chicago dogma. When, as after the dot.com crash, everybody suddenly knows better, will blame be properly apportioned? I doubt it, since nowadays blame allocation is as well developed as rocket science.
Deregulation succeeded when it did, because for a time investment money grew on trees. A new idea, good or bad, was capable of raising millions in the capital markets from buccaneer investors. Now things are different and capital is much harder to come by.
What Eircom needs in order to improve its range of services and thus its earnings is a large capital injection. The company probably needs to abandon poles and wires, with their high maintenance costs, in favour of broad-band digital links between microwave towers. Altogether an expensive proposition.
Bribing shareholders with a higher share price is not going to raise an iota of working capital. The purchase offer tells us nothing. How much capital are the bidders bringing to the table? That is the question. - Yours, etc.,
Ned Bright, Skibbereen, Co Cork.