Eircom to pay €114.3m for 3G licence

13 Mar 2007

Eircom has agreed to pay €114.3m for the vacant 3G licence that was originally the subject of a legal stand-off between the Commission for Communications Regulation (ComReg) and Smart Telecom. An Eircom spokesman explained that the infrastructure investment and rollout have yet to be decided upon.

Under the agreement hammered out between Eircom and ComReg, incumbent operator Eircom will pay ComReg an initial fee of €44.4m for the fourth 3G licence.

According to ComReg, Eircom met the relevant conditions of acceptance.

Under the agreement, the total licence fee will add up to €114.3m with the remaining payments phased over the next 15 years.

The licence includes a minimum requirement of 33pc demographic coverage to be met by the end of September 2008 and 53pc demographic coverage to be achieved by September 2009.

Eircom is then obliged to reach 83pc coverage by the end of October 2012.

ComReg said the addition of a fourth 3G player to the market could help to strengthen competition in the field.

The fourth 3G licence was originally awarded to Smart Telecom but when concerns over Smart Telecom’s ability to meet its financial obligations were raised ComReg pulled the licence. A subsequent High Court action taken by Smart was unsuccessful.

On the question of investing in the rollout of a 3G network and what path that would take, a spokesman for Eircom said no decision have been made by the company’s board.

“Performance guarantees of €100m are in place and the first payment of €44.4m for the licence has been made.

“The actual network rollout and implementation has yet to be decided upon,” he told siliconrepublic.com.

It is also unclear whether Eircom intends to market 3G broadband services under its own brand or under the brand of subsidiary Meteor Communications, the mobile operator acquired by Eircom for €420m in 2005.

By John Kennedy