New man at the Eircom helm - Ireland

Telecommunications International, Feb, 2002 by Anthony Garvey

It's a major plus in any new job to know that you hove been headhunted by the boss. And that's apparently the case with Philip Nolan, the 48-year-old former head of the UK public utilities company, the Lattice Group, who has just taken over as CEO of Ireland's EIRCOM. His task is to reshape Eircom as a private company after its painful flirtation with the stock market.

According to reports in Dublin, he was the personal choice of Sir Anthony O'Reilly, the millionaire Irish media tycoon and non-executive chairman of Valentia Telecommunications, the consortium which recently acquired Eircom for [euro]3 bn after a marathon takeover battle.

Enniskillen-born Mr Nolan, a graduate of Queen's University, succeeds fellow Northern Ireland man Alfie Kane, who spent seven turbulent and bruising years in the Eircom hot seat. It was Mr Kane who presided over the deregulation of the Irish telecoms market and who then led the company to a much-hyped public flotation three years ago.

That proved a disaster for some 500,000 small Irish shareholders, who were encouraged by the government to believe that investing was almost a patriotic duty, but ended up losing a third of their money. The subsequent sale to Vodafone of Eircom's lucrative mobile arm, Eircell, at what some regarded as a knockdown price, did little to mollify their anger.

Now that anger has resurfaced as Mr Kane exits with a goodbye package reported to be worth over [euro]2 m, and the outgoing directors, who presided over the dramatic fall in the Eircom share price, are awarded a [eurp]500,000 farewell bonus for 'services to the company'.

Against that background, even the handpicked Mr Nolan faces a formidable task in restoring Eircom's image and morale. In his favour is the fact that the company has now been delisted, which means he will not have to face the daily hounding over a plummeting share price that his predecessor had to endure, or the bitter bouts of management bashing that made recent AGMs resemble a blood sport.

But it is to the expertise and experience he acquired as chief executive of the Lattice Group, an FTSE 100-listed company that Eircom will be looking. His involvement in the restructuring of its 15,000-strong workforce will be particularly valuable, given that a similar exercise is regarded as both crucial and overdue at Eircom. He will also bring to the job lessons learned from operating in a heavily regulated market, which should help lessen the current tensions between the company and the office of Irish regulator Etain Doyle.

Mr Nolan was one of the driving forces behind the Lattice Group's move into telecams, and it was his role in building a fibre-optic telecoms network in London, using existing gas lines and the city's sewers, that pushed him to the top of the O'Reilly recruitment list. With Eircom under pressure from government and business to deliver an enhanced broadband network, such expertise will be a major asset.

People who have worked with Mr Nolan describe him as 'personable' and 'very sharp'. Streamlining and reshaping Eircom, a company with a debt of over [euro]2 bn, will test those attributes to the full. 'The company is plainly over-manned, and that is the single biggest cost that needs to be tackled," says Scott Rankin, a telecoms analyst with Davy Stockbrokers in Dublin.

But as part of the price for backing Valentia in the takeover battle, the Communications Workers' Union now holds a 30 per cent stake in the company, with his general secretary, Con Scanlon, recently confirmed as deputy chairman. "That will make it a very tricky situation to manage," claims the analyst. "Traditionally, the union has resisted lob cuts, and its position is now stronger than ever."

Mr Nolan's salary has not been revealed, but is believed to be higher than the [euro]643,000 he had been earning with Lattice. He has reportedly told friends that if he meets the performance levels expected by Valentia, he could make millions. If he does, it will mean Eircom has finally become a success story.