Eircom ‘most likely’ 3G bidder

PROSPECTS for Eircom’s re-entry to the mobile market hotted up yesterday as the fixed-line phone operator refused to comment on speculation it had bid for an advanced third generation (3G) licence.

Communications regulator Comreg said late on Thursday that it had received a formal expression of interest in the third and final 3G licence and gave other potentially interested parties until July 7 to enter the race.

Bidders for the licence were first invited in 2001 but there were no takers. A competition to allocate three similar licences at the time was won by international mobile giants Hutchison, Vodafone and O2. The move by Hutchison marked its first entry to the Irish market. Its 3G network, under the brand name 3, will be open for business later this summer.

It will provide more sophisticated technology and more advanced services than existing second generation networks, such as video downloads. Vodafone launched the country’s first 3G service last year. Industry analysts said yesterday that Eircom was a likely bidder and that the 3G licence would give it a strategic alternative to taking over Meteor as a way to re-enter the mobile market.

Eircom exited the market in 2001 with the sale of its Eircell mobile subsidiary to Vodafone. Eircom chief executive Philip Nolan said earlier this month the company remained committed to re-entering the mobile market but that it was looking at its options.

Goodbody analyst Neil Clifford said building its own 3G network would cost Eircom around €150 million upfront. This outlay, coupled with a bill of around €50m to secure the licence, would be “considerably less” than the likely asking price for Meteor, he said. Industry estimates have put a price tag on Meteor of up to €400m.

But a move by Eircom to build a fresh network from scratch may lead to overcrowding in the Irish market. Ireland already has four mobile networks belonging to Vodafone, O2, Meteor and Hutchison and mobile competition is expected to intensify with the entry of so-called Mobile Virtual Network Operators (MVNOs). MVNOs offer mobile services under their own brand but piggy-back off the infrastructure of an existing operator. Up to four MVNOs are believed to be eyeing the Irish market.

In a separate development, fixed-line operator Smart Telecom said it was considering a bid for the last 3G licence. Meteor has ruled itself out of the race for the 3G licence so far.

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