Smart fails in 3G licence bid, shareholders approve sale


1 Nov 2006

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Troubled telco Smart Telecom failed in its High Court bid to obtain a 3G licence, with Justice Peter Kelly ruling that the Commission for Communications Regulation (ComReg) was right to withdraw the licence.

The news came as Smart shareholders approved the sale of Smart’s assets for just €1 at an extraordinary general meeting (EGM).

Smart had been awarded a 3G licence late last year but ComReg withdrew the licence over concerns about a €100m bond Smart would have to pay the regulator for the licence.

ComReg welcomed the ruling, with chairperson Isolde Goggin saying the regulator felt vindicated by the court.

She said: “While we are disappointed that the award of the 3G licence has been delayed, to the detriment of consumers, we are pleased that these legal proceedings on this issue have now concluded.”

She said that ComReg will proceed to make arrangements to offer the fourth 3G licence to operators to bid for.

A spokesperson for Smart Telecom said last night: “We have received today’s ruling by the High Court. We now need to reflect on it and consult with our legal advisors.”

At an EGM held yesterday for Smart’s shareholders, Smart CEO Ciaran Casey confirmed that Smart’s decision to apply for the 3G licence and the subsequent court case had impacted on the company’s resources.

At that EGM, shareholders in the company voted to approve the sale of the business’s assets and liabilities of €40m for just €1 to Calally Limited, a company controlled by Brendan Murtagh.

Casey commented: “While we accept that the disposal represents a very disappointing outcome for all shareholders, it is the only option to ensure that shareholders have an opportunity to get some value for their investment.

“It also means that the long-term future of the business can be assured, creditors will be paid in full, employment for staff secured and services to the company’s customers be maintained,” Casey added.

The company said that Smart will cancel its admission to trade on the London Alternative Investments Market (AIM) on 29 November next.

Casey said that the restructured Smart will concentrate on corporate and residential broadband and data services. He said that in the last few weeks the company retained over 90pc of its residential broadband customers and has signed additional contracts with corporate customers for data services.

“Smart Telecom did achieve significant success in introducing real competition into the Irish telecoms sector — by sharply reducing broadband prices to the levels prevailing in other European markets. However, our ambitious targets to grow our share of the broadband market were impacted by the restrictions which we, and other operators, face in trying to compete with the incumbent operator in Ireland.

“The board and management take full responsibility for the situation which we find ourselves in, we are not seeking to blame anyone else,” Casey continued. “But we do believe that the Government needs to reassess how the market is operating if companies are to compete more effectively and if the benefits of competitively priced broadband services are to be made available to Irish residential and corporate customers.

“In other European markets consumers enjoy the benefits of low-cost broadband, alternative operators are permitted to connect new customers to their networks and are in a position also to generate significant operating margins,” Casey said.

Despite assurances by Casey that “all debts will be discharged in full in a reasonable timeframe”, a group of over 30 creditors urged Smart to present a detailed payment plan to creditors as soon as possible.

Martin Ferris of Ferris & Associates, chairperson of the Smart Creditors Action Group, stated: “Ciaran Casey made a clear public statement of commitment at today’s EGM and we hope that he will follow this through as soon as possible with a detailed payment schedule.

“The Smart Creditors Action Group now represents over 30 Smart Telecom creditors and all are anxious to have their outstanding debts cleared.”

By John Kennedy

66

DAYS

4

HOURS

26

MINUTES

Get your early bird tickets now!