O’Brien withdraws from Meteor race

David Clerkin

Sources close to the entrepreneur said Mr O’Brien withdrew on the grounds that the asking price was too much.

Eircom is believed to have bid as much as E410 million to re-enter the mobile phone market, but declined to confirm this yesterday.

The former State monopoly has expressed interest in Meteor but has also been keen to assure investors that it has back-up plans if it fails to trump other parties.

These include the option of becoming a mobile virtual network operator (MVNO), that would sell a mobile service under its own brand, but rely on the physical infrastructure of another operator.

Eircom has also lodged an application for a third generation (3G) licence with telecoms regulator ComReg. But the 3G route would involve hefty capital expenditure as eircom would be required to build its own network from scratch.

Meteor’s estimated value has soared since its US parent, Western Wireless, hinted earlier this year that it may be willing to sell the business. The 400m-plus price tag is considerably higher than the 150m value ascribed to the business as recently as last year.

The higher value has been put down to an improved performance that has seen Meteor gain market share recently and breach the 10% threshold for the first time.

Meteor’s attractiveness was further enhanced by a growing perception in the market that Eircom had little choice but to wrest control of a network of its own and may be prepared to pay whatever is necessary to do so.

Smart Telecom, a much smaller operator than Eircom, has secured the support of former Glen Dimplex co-owner and AIB chairman Lochlann Quinn in its attempts to win the Meteor race.

But industry analysts consider Smart an outside bet.

Western Wireless is expected to announce a decision on the sale of its Irish subsidiary towards the end of the month.