DUBLIN -- HIGHLIGHTS FOR THE YEAR END UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS

Offer update

On 24 April 2006, the Independent Board5 of the Company announced that it had entered into a bidding agreement with Babcock & Brown Capital Limited (BCM) and the eircom ESOP Trustee Limited (the ESOT) under which it agreed to provide due diligence information on the Company to BCM and the ESOT. The bidding agreement was entered into in the context of the potential offer by BCM and the ESOT of €2.20 in cash for each ordinary share in the Company (together with the right for shareholders to receive a dividend of approximately 5.2 cents per ordinary share) with a preference share alternative entitling ordinary shareholders to receive unlisted preference shares in the offeror bidding vehicle.

Due diligence and discussions between the Independent Board of the Company and BCM and the ESOT are continuing and a further announcement will be made if and when appropriate.

Dividend

On 14 May 2006 the board declared a second interim dividend in respect of the financial year ended 31 March 2006 of 5.2 cents per ordinary share payable on 26 June 2006 to all ordinary shareholders on the register of members as at 26 May 2006. The second interim dividend is in substitution for a final dividend in respect of the financial year to 31 March 2006 and no final dividend will be proposed at the annual general meeting.

Commenting on the results, eircom Chief Executive, Dr Philip Nolan said:

This year eircom has continued to deliver on the three strands of our stated strategy, driving performance in our core fixed line business, growing broadband and capturing value in mobile. All of this has been achieved against a backdrop of significant corporate activity, including the highly successful rights issue to fund the Meteor purchase.

Although the trends of increasing competition and pressure on margins continue, our core fixed line business recorded a strong fourth quarter delivering Adjusted EBITDA of €157 million. This brings the full year performance of the fixed line business to an Adjusted EBITDA of €597 million down by €13 million (2%) versus last year. A positive contribution from Meteor in quarter four brings Adjusted EBITDA for the group to €601 million.

Our investment in DSL Broadband is now delivering consistent growth, with around 250,000 customers today. Currently c.85% of our lines are connected to broadband enabled exchanges, allowing around three-quarters of the population to access broadband. DSL broadband availability in Ireland is now at a comparable level to our European peers.

Meteor continues to grow strongly. Subscriber numbers have grown by 66% over the year to 625,000 at the year-end whilst turnover has approximately doubled year on year. Subscriber growth in the fourth quarter was 60,000, of which 13,000 were post-paid customers. Post-paid now accounts for c.8% of the total subscriber base. Meteor’s total market share at 15% is well on its way to meet our target of 20% set at the time of the acquisition. Despite investing heavily for growth, Meteor contributed €4 million to Group EBITDA in the last quarter.

Investment in our fixed network continues and we have commenced a major investment programme to enhance the Meteor network. Our total capex for the year including Meteor and property was €233 million.

Overall the company continues to perform well whilst building a platform for the future and the strong performance allows the board to declare a second interim dividend of 5.2 cents which will be paid 26 June 2006.

eir