Harney urged to look into Eircell sale

A telecommunications operator has filed a formal letter with the Minister for Enterprise, Trade and Employment, Ms Harney, asking that the Competition Authority examine the potential sale of Eircom's mobile division, Eircell, to British mobile operator Vodafone.

Dublin company Budget Telecom is concerned that, under the terms of the potential sale, Vodafone will give Eircom exclusive access to operate as a mobile virtual network operator on Vodafone's mobile network.

Virtual operators do not build their own network but run calls over existing mobile operators' networks. Eircom has stated its interest, pending a sale of Eircell, in acquiring minutes on the Vodafone network so that it can offer corporate customers a package that includes mobile services.

Virtual operators generate revenue by receiving interconnect fees (a sum telecommunications operators pay each other when calls generated in one network terminate in another). They also offer cheaper call rates to mobile phone users who access their network by dialling a special prefix. Budget Telecom operates solely as a virtual operator, running calls over the Eircell and Esat Digifone networks.

"We would like the deal to be referred to the Competition Authority," said Mr Tadhg O'Toole, a director of Budget Telecom. Budget sent a letter to the Minister yesterday asking her to look at the current practices of Eircell and to consider the terms of an allocation of a virtual operator licence to Eircom as part of any sale to Vodafone.

Telecommunications regulator Ms Etain Doyle is conducting a cost analysis of the Eircell network to determine how Eircell is calculating the costs it passes on to interconnect partners.

In recent months both Eircell and Esat Digifone raised prices on calls to 1850 and 1530 numbers, eliminating the profit margins that virtual operators say allowed them to pass on call savings to their customers.

Mr O'Toole says Budget does not want to halt or delay a possible sale of Eircell to Vodafone, but wants to ensure that Eircom "not be given unique virtual operator access to the Vodafone network". All virtual operators should have access to the network, he said. He added that he thought Eircom shareholders would be "better served by a deal that doesn't create regulatory and competition issues".

Eircom is understood to have requested that it receive "bundled minutes" from Vodafone, a package of minutes that it would purchase outright and include in packages to corporate customers. An industry source said this would probably not involve the company operating as a virtual operator. An Eircom spokesperson declined to comment.