Meteor parent eyes opportunity for growth

8 Oct 2003

Meteor, Ireland’s third mobile phone operator, will get the lion’s share of its parent Western Wireless International’s annual US$40m investment because the company believes that Ireland represents its best opportunity for growth in 2004. Senior management of Western Wireless International made the pledge yesterday on a visit to Ireland.

Brad Horowitz, the president and chairman of Western Wireless International and John Stanton, chairman of Western Wireless, one of the major players in the US telecoms market, were in Dublin yesterday to review the operations and progress of their investment in Meteor Communications. WWI, which has an 80pc stake in the mobile operator, is the overseas arm of Western Wireless, which provides telecommunications services to much of rural America.

Meteor, which finally began operating in Ireland two years ago after a two-year delay caused by Orange’s decision to sue the regulator over the awarding of Ireland’s third GSM license to Meteor, missed out on the watershed years of mobile penetration in Ireland, which currently stands at over 80pc of the population. As a result, the company has been struggling to break out of its 3pc share of a market dominated by O2 and Vodafone.

The company has been claiming some notable victories in the prepaid mobile market by offering lower voice and text prices to Irish consumers. Yesterday, the CEO of Meteor said that the company was the only one of the three to make a “net gain” in customer numbers as a result of number portability, which was introduced earlier this summer. A spokesman for the company said that the company believes it will have boosted its shareholding of the Irish market to 6pc by the end of this year, and to 10pc by the end of 2004.

Western Wireless International chairman Brad Horowitz said: “In terms of the rationale as to why we would continue to invest in Meteor, it is part of our process to review them every year. We have a lot of hungry children in terms of subsidiaries around the world. In terms of our decisions to allocate capital, Ireland represents the best opportunity for growth.”

The decision to increase investment in the Irish subsidiary follows a year of speculation about Meteor’s future. Rumours ranged from it being sold to one of the two other mobile operators in the Irish market to it being the ideal springboard for Eircom to return to the mobile market following a moratorium that ends next May.

Western Wireless chairman John Stanton said: “We expect to invest US$40m throughout the course of 2003 and that goes to propositions that are generating cash and dividends for our shareholders. The lion’s share of that is being invested in Ireland.”

Looking at the direction of the operations going forward, Meteor chief Stewart Sheriff said that the company is developing GPRS-based packages aimed at various layers of the Irish SME market as well as a major marketing push for the Christmas consumer market.

Sheriff also said that in terms of expanding Meteor’s coverage beyond the present 85pc of population, “we have attempted commercial negotiations with both operators and examined opportunities for reciprocal agreements, and we have examined all commercial opportunities. However, the two operators don’t believe in co-operating with us and we believe that it is time for ComReg to step in”.

In terms of the potential to host mobile virtual network operators Sheriff said that he had not yet seen a proposal that would convince him that such a scheme would work. He also denied that Meteor has been in discussions with Eircom about offering the former state telco a conduit for returning to the mobile business.

By John Kennedy