Pricing proves trump card

The applicants for the third mobile phone licence were left in no doubt as to what the key criteria was - pricing

The applicants for the third mobile phone licence were left in no doubt as to what the key criteria was - pricing. Also high on the agenda were the proposed package to be offered to customers and how speedily the new service would be introduced.

The Office of the Director of Telecommunications Regulation (ODTR) was assisted by Danish Consultants Andersen Management International, which also evaluated the competition for the second mobile phone licence.

It had been thought that Orange put up a very compelling case for winning the licence by promising to treat Britain and Ireland as a single tariff area. However, the company did not specify what the tariff would be. Nor did it pledge to be cheaper than the existing operators. "There is more to offering a quality service than just price," Orange Group managing director Mr Hans Snook said.

It has been felt by many observers that with just two operators in the mobile market a duopoly was in operation and there would never be any major movement on price. Unsurprisingly, this is vigorously contested by Eircell and Esat Digifone, which claim prices have been reduced considerably.

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In its presentation Meteor promised it would drive down tariffs and focus on winning first-time customers.

This obviously impressed the ODTR. Meteor also placed a strong emphasis on customer care and pledged to set up electronic service kiosks throughout the country. These would offer a range of services including the facility to order a mobile phone and have it delivered the next day. Both Orange and Meteor promised to be creative in their siting of mobile masts. This is a difficult issue for the industry. Opposition to masts in some parts of the country is stern, to put it mildly.

The key to rolling out a mobile network quickly is to get planning permission, with little opposition. Environmental groups are well-organised and have thwarted Eircell and Esat Digifone in their efforts to build out their networks.

Even if they get site or sharing agreements - Meteor claim they have 100 sites secured in Dublin alone - they will still have to apply for planning permission, running the risk of opposition, planning board appeals and delays. RF Communications' managing director, Mr Sean Finlay, whose company is part of the winning consortium said yesterday that it would approach the issue with sensitivity, and would consult widely with local groups.

However Meteor will be under pressure to get up and running as quickly as possibly. Esat Digifone delayed its launch by three months because it was not happy that it could offer the quality of service it needed and incurred a fine of £1 million.

Meteor would also face fines if it does not provide coverage to at least one-third of the Irish population using the DCS 1800 spectrum within two years of the licence being issued. However, industry sources believe they should be able to meet their own earlier self-imposed deadlines and the Regulator's ones without too much difficulty.

Esat Digifone and Eircell have indicated a willingness to share sites, but only if it is commercially viable.