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Sunday 11 December 2016

Dan White: Is Eircom's change a €16m exercise in corporate vanity?

Staff at the Rebranding of Eircom to Eir at Eir's Headquarters at St John's Road, Dublin
Staff at the Rebranding of Eircom to Eir at Eir's Headquarters at St John's Road, Dublin

Eircom's €16m rebranding is an expensive waste of time. The money would be far better spent on cutting expensive broadband costs instead.

In case you haven't already noticed, Eircom is now Eir. Ireland's largest fixed line and broadband company is spending €16m on its new corporate identity which will "reflect the dynamism and confidence of our company".

Announcing the change, Eircom/Eir said that its new look "is a major milestone for the company, revitalising and modernising the look and feel of the Group".

What complete and utter tosh. This is the second name change at Eircom/Eir in the space of just 16 years - the former Telecom Eireann was re-christened Eircom soon after the disastrous 1999 privatisation. If a change of name is such a good idea then why didn't the first rebranding do the trick?

Giants

Of course Eircom/Eir isn't the first, and probably won't be the last, company to opt for an expensive name change. Booze giants Guinness and GrandMet rechristened themselves as Diageo following their 1997 merger, cigarette manufacturer Philip Morris became Altria in 2003, while in this country Waterford Foods and Avonmore adopted the Glanbia tag two years after their merger in 1997.

While there can sometimes be a very good reason for a rebranding - two existing companies coming together to form a new group springs to mind - all too often these re-christenings are expensive and vacuous exercises in corporate vanity.

Even at this early stage it's hard not to suspect that Eircom/Eir falls into the latter category. What on God's earth precisely is "Eir" supposed to mean? Is it perhaps an air-freshener manufacturer or a wind energy generator? Maybe it's a hot Eir producer! What is certain is that the new name gives absolutely no hint as to the company's main business activity - telecommunications.

Eircom/Eir chief executive Richard Moat - the company's third boss in three years - justifies the rebranding by pointing out that the company has invested €1bn in recent years.

Reading between the lines one could be forgiven for thinking that the company is anxious to put the memory of the 2012 examinership, the largest insolvency in Irish business history in which 40pc of Eircom's €4bn debt mountain was written off, behind it.

While Eircom/Eir can hardly be faulted for wishing to make a fresh start, is an expensive rebranding the best way to do it?

Couldn't the €16m being spent on the rebranding be put to more productive uses that might actually benefit the company's customers?

Even after the company's heavy investment of recent years, more, much more needs to be done to bring Ireland's broadband network up to the highest international standards.

A 2013 EU survey of European broadband quality found that Irish broadband speeds were below average in five of the eight categories in which this country was included.

Since then a number of steps have been taken to improve the situation. Eircom/Eir is once again investing heavily in broadband, last year the Government promised to invest €512m bringing fibre to rural areas while Vodafone and the ESB have announced a €450m broadband joint venture.

Wrong

All of this new investment is welcome but only time will tell how much of it is merely making up for past under-investment.

Finally, a word of caution: Even the best-planned corporate rebrandings can go horribly wrong. In 1989 Woolworths in the UK changed its name to Kingfisher. The justification was that, as the group was expanding into other retail formats - most notably the B&Q DIY chain - it needed a new identity to reflect its broader focus.

All went swimmingly until, with the letterheads changed, the stationery reprinted and the plaque on the head office front door replaced, it was pointed out that the kingfisher was one of the few birds that fouls its own nest.

Eircom/Eir can't claim that it hasn't been warned!

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