3 ‘proceeding’ with 3G network rollout

4 Jan 2005

3 Ireland is proceeding with its 3G network rollout and is in the process of acquiring additional sites through Threefold, a joint venture company it has established with Esat BT, a spokesman has told siliconrepublic.com. The news comes on the heels of reports that allege the Hutchison subsidiary was considering abandoning its network plans for Ireland because of moves by the Commission for Communications Regulations (ComReg) to pave the way for mobile virtual network operators (MVNOs).

Rumours circulated in December that the company was freezing investment in its Irish network rollout because the advent of MVNOs would represent a considerable change in conditions compared with when 3 Ireland’s parent company Hutchison Whampoa was granted its 3G licence in March 2002.

Last month, ComReg issued a directive citing operators such as Vodafone and O2 as having “significant market power” and therefore it was directing them to host MVNOs on their networks. MVNOs — companies that offer mobile services on the back of the infrastructure of an existing mobile operator — are enjoying widespread success across Europe. In the UK Virgin Mobile is planning an initial public offering based on its success in the UK marketplace.

However, 3 UK spokesman Ed Brewster told siliconrepublic.com that the company had no comments to make on the matter other than that it was still acquiring sites in Ireland. He said that 3 has established a joint venture with Esat BT called Threefold and that some 100 contractors are currently engaged in rolling out the network from offices in Dundrum, Dublin. Last year 3 awarded Esat BT a €150m contract to roll out its 3G network in Ireland.

Last month 3 signed a roaming agreement with Vodafone Ireland that will enable it to offer 2G voice and data services to 99pc of the population. “Our network is live and we have been offering corporate mobile services for some time now in the Irish market and we have published our tariffs online. However, no date for retail or consumer services has been announced. We have a date in mind, but we are not revealing it at this point in time,” Brewster said.

“In terms of our network rollout we are happy with our progress. It’s not a small job but we’re getting there,” Brewster added.

In terms of the competitive threat that MVNOs present to 3 in the Irish market, Brewster would not be drawn to comment. However, he argued that real advantage in the mobile business lies in an operator owning its own network. “Other than that they are offering a service ‘plus cost’. The only reason Virgin has been so successful in the UK is because it has a great brand. However, MVNOs don’t control their own network or cost base, plus they have to negotiate a rate that is going to make money for the company that owns the network. That is the fundamental problem facing MVNOs, it is always going to be plus cost,” Brewster said.

By John Kennedy