Eircom eyes 3G licence: reports

23-11-2006

by Charlie Taylor

Eircom is planning on accepting the last remaining 3G licence before Christmas, according to reports.

Robert Haulbrook, chief executive with the telco's mobile division Meteor, told the Irish Independent on Thursday that it does intend to take up the licence which had previously been offered to Smart Telecom ahead of Eircom.

The offer of the licence was withdrawn earlier this year based on issues surrounding a EUR100 million bond to be paid to ComReg by Smart. In October, the High Court ruled that the communications regulator was within its rights to refuse to grant the licence to the now beleaguered telco.

Doubts had been raised as to whether Eircom would accept the fourth and final 3G licence due to the expense of rolling out 3G services nationwide. However, Haulbrook said that Meteor was aiming to share the 3G network with other mobile operators in order to reduce the cost of rollout by as much as 25 percent.

Speaking with ENN, an Eircom spokeswoman said she had nothing to add to Haulbrook's comments.

Eircom currently has an agreement in place with O2 to use its 2G network in areas of the country where it doesn't have coverage. However, that deal, which was signed in August 2004, is due to end soon and Meteor will shortly switch over to Vodafone's network instead.

Eircom has been making inroads into the mobile market since it acquired Meteor for EUR420 million in 2005. According to the operator's latest results, Meteor grew its customer base by 109,000 over the six-month period ended 30 September 2006, with 51,000 during the most recent quarter alone. Meteor now boasts a 16 percent share of the mobile market, compared to around 10 percent prior to its acquisition by Eircom.

Nonetheless, despite the fact that revenues totalled EUR255 million in the 15 months to March, Meteor has clocked up pre-tax losses of EUR81 million. This compares with losses of EUR35 million for the same period in 2004 when revenue was slightly below EUR100 million.

Meteor's losses are unlikely to upset its parent too much given that Eircom itself racked up revenues of EUR494 million for its latest financial quarter ending 30 September. This marks a rise of 11 percent year-on-year.

In a separate development last week, Dublin-based telecoms firm Swiftcall, which offers low-cost, "no-frills" international telephone calls through prepaid cards, also expressed an interest in the remaining 3G licence.