Approval for €420m Meteor deal expected soon

The Competition Authority is likely to approve Eircom's €420 million take over of mobile player, Meteor, before Christmas, The Irish Times has learned.

Last July, Eircom won the race to buy Meteor from its parent, Western Wireless, when it bid €420 million for the mobile network operator. However, the Competition Authority, has to review the deal to ensure that it will not result in substantial erosion of competition in any of the markets in which the two companies operate.

That process began in August, soon after the deal was agreed and the authority sought extra information from Eircom in September.

The first stage of the probe is widely expected to end early next week. Some industry sources have suggested that the Competition Authority may decide to go to a more in-depth phase two investigation, which could last into next February.

However, The Irish Times understands that the authority is unlikely to exercise this option and will clear the merger, with some conditions attached, before Christmas.

This will allow Eircom to hit its own targeted deadline of completing the Meteor purchase early next year.

It is not clear what kind of conditions the authority will impose on Eircom. Many of the company's competitors hope that it will be asked to open up the link between its exchanges and consumers phones to competitors.

Eircom is the State's dominant fixed-line player, and is coming under increasing pressure from communications regulator, ComReg and its competitors to open up this element of its network to other players.

The Competition Authority's former chairman, Dr John Fingleton, made it clear on several occasions that he believed there was little or no competition in the Republic's fixed-line market.

Meteor is the smallest of three players in the Republic's mobile market, with around 400,000 subscribers.

The authority's only remit is to establish if the deal will result in a substantial lessening of competition in any of the markets affected by the merger.

Eircom last week delivered a document to ComReg detailing how it intended to facilitate competitors' access to the link between its exchanges and customers' equipment. This element of the network is known as the last mile or the local loop.

However, both ComReg and its competitors criticised its proposals for not going far enough.

Eircom has already said that it will cut mobile charges by 20 per cent when it enters the mobile market.

Both it and Meteor have applied separately for licences to develop networks for the new generation of mobile technology, known as third generation, or 3G.