Tesco to offer mobile services to Irish consumers

20 Dec 2006

Tesco said yesterday that it intends to become a mobile virtual network operator (MVNO) as part of a joint venture with O2 Ireland. The move will make Tesco Ireland’s fifth mobile operator.

“The intention is to launch services in the summer months,” a spokesman for O2 told siliconrepublc.com.

The new operator will be called Tesco Mobile and will use the 089 prefix.

The company said it will enter into immediate negotiations with other mobile operators to have number portability at the time of launch.

O2 Ireland chief executive Danuta Gray said that Tesco Mobile will operate separately to O2.

The news was “welcomed” in a tongue-in-cheek manner by third-generation operator 3, currently Ireland’s newest operator, which said: “More choice for consumers means more people think about switching instead of remaining with the old networks. 3 is set to benefit from the churn a new entrant brings.”

The company is not Ireland’s first MVNO. Telecoms entrepreneur Sean Bolger ran Ireland’s first MVNO in 2000 under the Cellular 3 brand and met with some difficulty in the courts in a battle against Eircell, now Vodafone Ireland.

The two companies had struck a deal whereby Cellular 3, subsequently under the Imagine brand name, would buy bulk airtime and sell it on. The trouble was, Bolger was getting too good at it, radically undercutting Eircell’s tariffs and quickly amassing 20,000 customers. Eircell’s decision to stop the service resulted in a High Court case.

The court ruled that despite having 64pc of the Irish market, Eircell was not in a dominant position and was right to protect its position. Cellular 3 closed for business with the loss of around 240 jobs.

By John Kennedy