The economic boom generated by the digital communications revolution has benefited many, but none so much as those that took the early risks. Sitting in Sean Melly's top-floor Dublin offices in Embassy House overlooking Herbert Park on one side, and a bustling Ballsbridge on the other, the scale of benefits accruing to the 35-year old Mr Melly is apparent.
A successful entrepreneur, Mr Melly believes he is poised to make another fortune, and because it is based on the model he used to make his last one, there is little reason to imagine he won't.
Six years ago, Mr Melly founded his own telecoms company, TCL Telecom. This was pre-telecommunications deregulation, and the playing field for companies pitting themselves against the incumbent Telecom Eireann was less than even.
However, TCL built up a business competing against Telecom Eireann in the business sector by providing international and long-distance telecoms services. Then in 1996, telecoms giant WorldCom - prior to its acquisition of MCI - took a 30 per cent shareholding in TCL.
A year later, WorldCom bought out the remainder of the company. The deal's value was never disclosed, but reports at the time suggested WorldCom paid around £17 million (€21.59 million) for 70 per cent of the company. Of this Mr Melly stood to gain around £6.5 million, while his long-time investment partner, Mr Bernard Somers, received around £3.5 million.
Mr Melly stayed on as chief executive of the newly named MCI/ WorldCom Ireland before standing down to pursue his "private investments". The most significant of these, eTel, has been operating for the last five months and last week raised $4 million (€3.9 million) following an initial round of funding which valued the company at $30 million.
It specialises in obtaining licences in the pre-liberalised Central European telecommunications market, and Mr Melly plans another major institutional fundraiser, to raise around $50 million, for early summer.
"A lot of people would say I'm just repeating what I did in Ireland, but it's actually easier second time around, so we decided to take a multi-country approach," Mr Melly says.
The firm has a presence in the Czech Republic, Hungary and Poland, where telecommunications deregulation is scheduled to take place in each of these regions every year for the next three years. The Czech operation is the most advanced, after Mr Melly seed financed a telecoms start-up called Globix in Prague two years ago. Following rapid growth, Globix recently reversed back into eTel, and it currently employs 25 people in Prague.
In Hungary, eTel goes live next month, and in Poland Mr Melly says the company is at an "advanced stage" of securing a telecommunications licence. If successful, eTel's market will amount to a combined population of 60 million. Operations will be serviced through an international gateway based in Frankfurt. ETel's main telecoms carriers are MCI/WorldCom and RSL Com, but it also uses state phone companies and alternative telecoms suppliers.
Much of Mr Melly's success lies in removing what appear to be immovable barriers, and finding a way forward in a heavily regulated industry.
"When Denis O'Brien and myself did this here five years ago people just weren't aware anyone other than Telecom Eireann could provide telecommunications services. These countries are no different now. Everyone expects telecommunications deregulation will be accelerated in these regions," he explains.
"They are all in Tier One accession discussions to the EU, so they are already starting to align their policies and trying to attract multinational investment. Sounds familiar doesn't it, and we have first mover advantage," he says.
By getting in early and establishing a customer base, eTel provides international telecommunications giants with an attractive entry point. Mr Melly is in no doubt that eTel is an acquisition target. Already two telecommunications companies have expressed interest in investing in the company, but Mr Melly would prefer to sell the company as an outright package within two or three years.
"This time we won't bring in a telco for a minimum shareholding. You can't be a little pregnant with these guys, it's all or nothing," Mr Melly says.
Reflecting on the current telecommunications environment in the Republic, Mr Melly says he is disappointed that the Office of the Director of Telecommunications Regulation (ODTR) has failed to make an authoritative impression on the Irish telecommunications market.
"It seems to be in neutral which is the most dangerous position. The director's position needs to be endorsed publicly or replaced. The situation with the mobile licence is an international disgrace. The tender process isn't clear or rigid enough and open to all sorts of interpretation."
Following British Telecom's bid for Esat Telecom this week of almost £2 billion, Mr Melly predicts huge difficulties for Eircom, which he believes already has serious management team difficulties.
"The Esat deal is massively negative for Eircom, not that they needed another blow. BT was a natural partner for Eircom, and in one fell swoop it has become its single biggest competitor."
Mr Melly now believes Esat has greatly strengthened its ability to attract a lucrative multinational customer base.
"Esat was losing out to big multinational companies which tend to lease multi-country telecommunications solutions from bigger players. It was getting to the point unless you had a multi-country offering you weren't in the tender. With BT on board they can battle it out with WorldCom etc., and meanwhile Eircom will be sidelined as it gets pushed out of this market."
At present, Mr Melly spends around 75 per cent of his time on eTel, while the remainder goes into his private investments which are almost exclusively in Irish start-up technology-based business. The most significant include Educational Multimedia Group (EMG) and eWare.
In the last year he has made around five similar investments, three of which will involve an advisory role in bringing the company forward. Mr Melly also recently invested in Datalex when it raised private funding of $30 million.
"We see about five new investment opportunities a week, and we're not even a venture capital company. The hardest thing out there at the moment is finding strong people to execute a business plan," he says.
