AUSSIE investment bank Babcock & Brown wants to take over Eircom and right all the wrongs inflicted on the Irish people by the former state telecom company over the past seven years.

Split the evil beast. Invest in a network company, so that high-capacity fibre will run into every home, opening up a whole plethora of services. Sell the retail division, so that competition — fair and free — can flourish. A brave new world, no less, in the guise of a €2.4 billion takeover.

Sadly, telecoms in this country is no morality tale.

It is glib simply to blame the privatisation of Eircom or indeed its sale of the national telecom network to venture capitalists in 2001 for poor broadband take-up. The real problem with the Irish telecom industry is the long-standing and highly adversarial relationship that exists between Eircom and ComReg, and between the department of communications and Eircom.

Since its inception the communications regulator has held firm to the noble cause of reducing the cost of telecoms here. It has served the country well.

Eircom has maintained that promoting investment in its network and operating a pricing regime that once demanded cuts in tariffs of 5-6% a year were simply not compatible. Whether owned by venture capitalists or capped ventriloquists, the owners of a telecom network demand a return.

But what class of a return? One that rewards bloated payroll and inherent inefficiencies? Government suspicion of Eircom’s “return” is so deep it has spent €80m of taxpayers’ money constructing an alternative telecom network for a mere 4,000 subscribers.

The fundamental conflict between pricing and investment return remains unresolved. One of the great ComReg victories of the past was getting Eircom to offer flat-rate dial-up internet at cost. The dial-up rate is now so low, at about €9 a month, it acts as a disincentive to switching to broadband. There is broadband coverage across 85% of the country. There are almost three times as many dial-up customers.

The broadband debate blathers on, like some wearisome and noisy pub argument, with little or no clear thinking. Maybe the fresh Babcock & Brown approach will bring a resolution to the conflict, and an end to the decade of distrust. Splitting the network and retail arms is a good start. The Australians also promise more investment in the network.

But the inevitable consequence of higher investment will be higher prices. It will be interesting to see how that will that go down with the rest of the market, the government and ComReg.

Big-hitter Barry is keen not to waste any energy

NTR’s Jim Barry is still looking to hit his next toll bridge-style home run.

His latest wheeze is a €120m investment in a new bioenergy company, Bioverda. NTR is involved in waste through Greenstar and alternative energy through Airtricity. So rather than upset anybody, it has decided to set up yet another new division involved in alternative energy derived from waste. Clever.