|
Following more than a year of discussions, the Office of the Director of Telecommunications Regulation and the Department of Finance have reportedly agreed to a compromise that will bring in some EUR394 million (IEP310 million) in licence fees for the government.
The Irish government had been hoping for higher fees, eyeing the successes of countries like the UK and Germany, which together brought in some STG60 billion when they awarded their 3G licences at auction. But those auctions helped kick-start the telecoms sector crash in particular and the IT recession in general, and the competitors for Ireland's licences were unlikely to pay anything like the fees they had agreed to in Europe.
Ireland will award four licences in all, including three Class B licences at EUR114 million apiece and one Class A licence at EUR51 million, according to media reports. Although the Class A licence has a lower overall fee, the operator that wins that licence will be required to roll out its service quickly across Ireland, while Class B licence holders will have at least an extra year to achieve the same level of coverage.
When telecoms regulator Etain Doyle first announced the structure of Ireland's 3G licences last December, she said the Class A and Class B licence holders would have until 2005 and 2006 respectively to reach 80 percent coverage. That deadline could be extended in light of the delay in starting the competition.
The regulator also said last year that she would look favourably on companies competing for the Class A licence if they also agreed to resell 3G airtime to rivals who want to offer a Mobile Virtual Network Operator service (MVNO). But in the time since the regulator first made that announcement Ireland's only MVNOs, Meridian's Cellular 3 and Spirit Mobile, have disappeared following a dispute with Eircell that cut off their access to mobile airtime in Ireland.
Jemma Houlihan, telecoms analyst with ABN AMRO stockbrokers, said the waning competition in Ireland's telecoms sector could dampen enthusiasm among competitors for the licences.
"We would not expect to see intense competition for the mobile licences," she said, adding that while offers are expected from Eircell Vodafone, Digifone and Meteor, other outside parties may not find the fees or the licences attractive.
"It would be difficult to see another outsider come in to made a credible offer," she said. "There is a possibility that there will not be a fourth bidder."
The ODTR is expected to announce fees for the licences this week, and in addition to the local operators both Hutchinson Whampoa and a consortium backed by Denis O'Brien have been named as possible competitors for the 3G licences.
|
