Dáil Éireann debate -
Tuesday, 25 May 1993

Vol. 431 No. 3

Telecom Éireann Discussions.

Mr. Noonan

(Limerick East): There has been a series of reports in the media and I would like the Minister, if he can, to clarify some points. I presume that in the normal way he will have a prepared script but if my questions are not answered in the script, perhaps the Minister will answer them on an impromptu basis.

Were there meetings, formal or informal, between Lord Grey and the Taoiseach? Were there meetings between officials of the Minister's Departments and their counterparts in the United Kingdom or meetings between his officials and people employed with Cable and Wireless? Were there meetings between Telecom employees and employees of Cable and Wireless? If any such meeting took place, will the Minister outline the agenda and the nature of the relationship, putative or otherwise, explored between the parties? Will the Minister tell us why there was no reference to such contacts in the debate last week on the motion in the name of Deputy O'Malley when the Minister took the opportunity to give what we thought was a very full and open account of his attitude towards Telecom Éireann?

What is the Minister's view on the relationship between Telecom Éireann and a telecommunications company in the United Kingdom or in another EC member state? Does he favour a joint venture, an exchange of technology or some kind of partnership relationship in the medium to long term, taking into account that while Telecom Éireann is a very large company in this country, it is not a very big international player in terms of communications compared with the major private and state companies in other EC countries?

On the question of ownership, is there substance to the report that part of the discussion at whatever level dealt with the possibility of Cable and Wireless purchasing 25 per cent of Telecom Éireann? Will the Minister comment on the question of the ownership of Telecom Éireann? Does he think that Telecom Éireann should remain in State ownership? Is his definition of State ownership that the total shareholding should be held by the Government or would he envisage that, for reasons of capitalisation, for the payment of debt or for any other good or valid commercial reason, a minority stakeholding could be acquired by a company such as Cable and Wireless?

Minister for Transport, Energy and Communications (Mr. Cowen)

As I announced yesterday, arising out of an approach from Cable and Wireless with a view to establishing mutually beneficial links with Telecom. I decided in the first place to obtain the views of Telecom before giving detailed consideration to any proposals that might be made. Arising from this I am aware that talks have taken place between Telecom Éireann management and Cable and Wireless on the possibility of a joint venture or some other form of strategic alliance without any commitment by either side or by me.

The basis of these discussions are within the framework of the Programme for a Partnership Government. The programme states:

We will implement the principles regarding State enterprise set out in the Programme for Economic and Social Progress, and guarantee that the main strategic utilities and enterprises remain in the ownership of the Irish people, while having the freedom to enter joint ventures with the private and co-operative sectors. We intend to ensure that strong public companies will also provide value for money to the consumer. And we are also committed to the principle that there must be adequate rewards for achievement coupled with penalties for failure.

The programme also states that the Government in seeking to provide a first class telecommunications service in Ireland will "encourage and support Telecom Éireann in developing their overseas business, with a view to enabling Telecom become a significant international Telecom organisation".

To achieve these strategic objectives it is necessary for Telecom Éireann in the normal course of its operations to seek out business opportunities with other international telecommunication organisations.

In that context, and on that understanding, preliminary discussion were entered into by Telecom with Cable and Wireless. The discussions which have taken place so far are preliminary and have not focused on any specific proposals. There is no question of an offer in regard to 25 per cent and at the State Sponsored Bodies Committee today, the chief executive of Telecom Éireann categorically denied that Cable and Wireless made any proposals about buying out part of the company. The idea was not even discussed. Negotiations have not taken place in relation to any aspect of Telecom's business.

It would be premature to speculate on the outcome of the discussions between Cable and Wireless and Telecom Éireann at this stage. As the preliminary discussions come to a conclusion both sides will review the position to determine if advantageous opportunities exist. As a result of those discussions the matter may not be taken further. I will await the view of the board of Telecom Éireann on that matter. They will be properly briefed at that stage and I will then report the matter to the Government. The meetings will be of a technical or operational nature to determine whether compatibilities or synergies exist between the two companies. That will be checked out with other Telecom organisations which Telecom regard as of potential benefit to it. No meetings have taken place between officials of my Department and Cable and Wireless. Representations to my Department were immediately passed to Telecom so that the board could be informed of any developments and it could form a view and report back to me. A chain of command exists in that regard.

In relation to commercial semi-State companies, the management consider operational matters and a clear undestanding of the framework within which they operate is stated in the Programme for Government. That framework has not been breached in any form and management, when it concludes its discussions, will bring the matter to the board's attention, the board will form a view and then contact me. It would be premature at this stage to speculate on the outcome of those discussions. When the discussions are concluded I will gladly deal with the matter.