Details of the competition for the third mobile phone licence are expected to be announced within the next few days, possibly as early as tomorrow. The licence could be awarded by the end of March. The licence is expected to cost more than £5 million and possibly as much as £10 million. The precise price will depend on the conditions attached to it. The entrance of a new competitor into the marketplace should lead to a price war, resulting in cheaper mobile call charges.
Sources predict that a new operator could be up and running within 12 months of being awarded the licence.
The competition is being overseen by the Office of the Director of Telecommunications Regulation. A spokesman for the office confirmed last night that an announcement was imminent, but declined to specify when. It is understood a few issues are still being finalised. However, the office has already said it would announce competition details towards the end of this month.
Central to the competition will be the price and the terms under which a new operator will run the service. Industry sources said yesterday the conditions will offer the operator the option to roll out its own service or to part build a network and "piggyback" on the two existing operators where it does not offer its own coverage.
The licence, known as the DCS1800, is a digital-based system, which is more commonly used in cities and other areas of major population. It operates at a higher frequency than the GSM system.
Both Eircell and Esat Digifone will be watching the competition closely. The regulator, Ms Etain Doyle, will most likely have to specify interconnection rates for the potential operator if the current licence holders are obliged to part-carry calls for it.
Sources said the regulator would be anxious to ensure any new entrant would not be obliged to build a complete network themselves. Eircell and Digifone have been promised DCS licences when the regulator feels there is sufficient competition in the marketplace. Industry sources said it is likely that the terms of the competition for the new licence will give a strong indication of when the two existing players in the market can get DCS licences themselves.
The price of the licence also depends on what view the regulator takes of the market. If she feels that it is more fully developed and DCS will replace some fixed line phones, she may opt for a figure of £8 million£10 million, according to some sources. Digifone paid £15 million for its licence which industry experts said was very cheap. However, the fee was capped at £15 million following consultation with the European Commission, which had objected to the terms the Government was offering to bidders.
Meanwhile Esat Telecom, which is a 45 per cent shareholder in Digifone, said yesterday that proceedings between itself and Dublin Corporation regarding construction of its fibre optic network in Dublin had been resolved. Digifone said the injunction granted by the High Court to Dublin Corporation on Friday had been lifted.
