The telecommunications regulator is seeking an initial once-off fee of £7.5 million each from mobile operators Eircell and Esat Digifone to give them access to more capacity for their networks.

It is understood that both companies were surprised to be asked for the fee, known as "spectrum access" charge. Both are consulting their advisers on the matter. One source described the demand as "outlandish" and said there had been no mention of this cost when consultations took place with the regulator's advisers.

Both operators use GSM 900 technology to carry calls. The growing number of mobile users, now heading for one million, means they need more capacity.

The GSM 1800 spectrum will supply the extra capacity the operators need and will be valuable in urban areas where there is increasing pressure on the networks. The system is also more cost effective in urban areas and provides better coverage in rural areas. Esat Digifone chief executive Mr Barry Maloney said he was delighted that the regulator, Ms Etain Doyle, had finally begun the application process. "We have been screaming for extra capacity for some time," he said.

Eircell chief executive Mr Stephen Brewer said his company, which has around 650,000 customers, also needed extra capacity. He said he was surprised about the £7.5 million price tag, but said the regulator was exercising her prerogative.

Meteor, which successfully bid for the third mobile phone licence, will pay £10 million for its spectrum, which is also GSM 1800 spectrum. But the regulator and Orange, an unsuccessful bidder, are engaged in a legal dispute due to resume in the High Court later this month. Legal argument has delayed the award of a licence for almost nine months.

Sources said whatever perceived advantage Meteor may have had in being first on the GSM 1800 network would now be eroded. It had been planned to give the third operator a lead-in time of about one year, but legal action and growth in phone usage have meant the spectrum will have to be allocated sooner, according to industry observers.

The companies will be unable to use the extra capacity until at least 2000, but will run tests on it from June. It is expected that both parties will succeed in their applications.

In a statement, the regulator said the criteria used would include an assessment of the expected benefits to consumers in terms of services to be provided, tariffs to apply and quality of service.