Smart Telecom's largest shareholder, Brendan Murtagh, appears close to a new interconnection agreement with Eircom that may clear the way for him to set about refinancing the troubled telecommunications firm.
The terms of the new interconnection deal were not clear last night. However, the proposed agreement has been the subject of ongoing contact between the two companies since Tuesday.
The talks started on the morning after 45,000 of Smart's residential fixed line and corporate customers were cut off the system without warning.
Mr Murtagh owns 20 per cent of Smart, whose shares on the Alternative Investment Market (AIM) in London were suspended on Tuesday morning after Eircom cut off its connection. Amid a deepening financial crisis at Smart, Mr Murtagh has been keeping the company afloat in recent times to the tune of €2.5million-€3 million per month.
His proposal to lead a consortium to refinance Smart is conditional on a new interconnection agreement being put in place. Without such an agreement, Smart would not be able to offer any service that makes use of Eircom's network.
It is considered likely that a reconstituted Smart, delisted from the AIM, would concentrate on its broadband offering.
Smart was not party to an interim deal agreed on Tuesday between Eircom and the communications regulator ComReg, which was designed to help Smart's fixed-line customers choose an alternative supplier.
In addition to the intention to keep the broadband business going, Mr Murtagh is awaiting a High Court judgment on Smart's challenge to ComReg's decision to withdraw its award of a 3G mobile licence to the company.
Eircom is unlikely to sign a new agreement, unless it receives full payment of the money it says it is due from Smart. However, there has been some dispute over the sums of money that Smart owes Eircom.
Sources close to Eircom insist that Smart had been billed for €4.3 million as of Monday and that €1.7 million was already in arrears when the network connection was cut at 5pm that day.
Sources close to Smart say that a sum of €309,000 was the subject of a long-term dispute at that time and that a sum of €459,000 was due last Tuesday. Further sums of €410,000 and €480,000 were falling due later this week, but the same sources insist that €1.7 million was not in arrears last Monday.
