Smart Telecom awaits court’s decision in 3G battle with ComReg

THE hearing of Smart Telecom’s bid to overturn the decision of the Commission for Communications Regulation not to grant it the lucrative multi-million euro 3G mobile phone licence ended in the High Court yesterday.

The case, before Mr Justice Peter Kelly, has been heard in the High Court over the last 14 days. It has been adjourned pending Mr Justice Kelly’s judgment.

Smart Telecom brought a legal action after ComReg’s decision last February not to award the licence to Smart Mobile Limited because of what ComReg claimed was a failure by Smart to provide a €100 million performance guarantee bond in a form acceptable to it within the specified deadline.

ComReg, it was claimed, failed to fulfil its obligations and interfered with Smart Telecom’s rights in an unfair and disproportionate manner.

In the action, Smart Mobile is seeking a declaration that there exists a “concluded contract” between Smart and ComReg for the awarding of the licence.

Alternatively, Smart is seeking a declaration that having selected it as the successful tenderer for the 3G licence, ComReg was obliged to give Smart a reasonable period of time to comply with the conditions additional to those set out in the tender document.

Smart is also seeking an order restraining ComReg from awarding the licence to any other party or treating its negotiations with Smart for the award of the licence as being at an end.

Smart Telecom was the successful tenderer for the lucrative 3G mobile telecommunications B Licence, which was awarded after a public tendering process in November 2005.

ComReg said it would grant the licence to Smart Mobile Limited if Smart fulfilled certain conditions.

Smart began legal proceedings after a letter from Com Reg on February 13, 2006, which stated it was not granting the licence to Smart because of its alleged failure to meet the terms of the tender process.

When Smart was told it had won the bid, ComReg told Smart it was required to provide a cheque or bank draft for €44m; the first annual spectrum fee of €1.1m for the 3G spectrum; a guarantee payable on demand of €7.6m; and a performance guarantee bond for €100m as financial guarantees to underpin roll out and coverage obligations. There was also €12m in relation to the GSM spectrum fee.

Smart says it complied with the conditions and furnished three separate performance guarantee bonds for €100m for consideration and approval by ComReg.

Smart has claimed that ComReg was obliged as of January 30, 2006, to grant the 3G licence to Smart.

Smart claims ComReg informed it the draft performance guarantee bonds were not acceptable and that the deadline of 5pm on January 30, 2006, was absolute.

It is claimed that in emails ComReg raised a number of amendments on January 28 and January 29, 2006, in relation to the draft bonds and sought to impose significant additional requirements on Smart.