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Cellular 3 to shut down in Ireland
Tuesday, April 24 2001
by Rory Kelleher


Meridian Communications Limited, which trades under the Cellular 3 Imagine mobile
phone brand, is to close with the loss of around 240 jobs.



"We have put our staff on notice which will run out in the middle of May,"
said Brian O'Donoghue, managing director of Cellular 3.

"We will keep the legal case against Eircell (for abuse of dominant position in
the Irish mobile market) going and take it the whole way to Europe if we have
to," said O'Donoghue.

The company announced on Monday that it would begin letting around 40 people go
today. In addition, O'Donoghue said the company was well on its way to being
wound up.

The closure means that the Republic will have no mobile virtual network operators
as Spirit Mobile was providing its service through a deal with Meridian.

However, the company said that Cellular 3 would continue to build its businesses
across Europe and was about to launch a new service in Denmark.

Eircell had terminated its volume discount agreement (VDA) with Meridian/Cellular
3 on 05 April, following a high court judgement that found Eircell not to be the
dominant operator in the Irish market. However, in the same High Court ruling
Eircell was found guilty of breaches of contract with Meridian.

The volume discount agreement, on which Cellular 3 business was based, allowed
the company to purchase airtime from Eircell at a 40 percent discount. 

Cellular 3 had successfully received a high court order on Friday preventing
Eircell from ending a mobile phone supply service to 20,000 Imagine customers.
However, Eircell will ask the High Court today to lift that order today.

The interim injunction had also prevented Eircell from presenting a petition to
the court to wind up Meridian.

Eircell claims to be owed around IEP6.7 million by Cellular 3. Meridian has said
it could claim compensation of over IEP200 million from Eircell for breaches of
contract.

It is understood some of Meridian's management will move to Denmark. Meridian's
Irish operation had been ring fenced following the high court judgement on 05
April. 

On Friday Sean Bolger, chairman of Meridian, had alleged Eircell was attempting
to destroy Meridian's business. He had also claimed negotiations were taking
place to sell Meridian's subscriber base worth over IEP10 million to a
competitor.