Smart beats rivals to win last 3G licence

Telecom operator Smart has beaten off competition from Eircom and Meteor to win a licence to operate the next wave of mobile technology.

The communications regulator, ComReg, announced yesterday that it was going to offer Smart the fourth and final licence to operate a third-generation (3G) mobile network in the Republic.

Smart welcomed the announcement and said that it would launch the new service next year.

3G technology is the next advance in mobile networks, and offers a new range of services including better internet access and video streaming of live pictures to handsets.

The regulator said its application outperformed its two competitors - dominant fixed-line operator Eircom and mobile network Meteor - in the agency's evaluation process.

ComReg said Smart's application for the licence earned high points on the projected speed at which it planned to roll out its network, the coverage it would be able provide at key milestones in the process and attractive performance guarantees.

"As a new market entrant to the Irish mobile market, they earned maximum points under the promotion of competition criterion," a ComReg statement said.

"As a result of these markings relative to the other applicants they emerged as the first-ranked applicant and are therefore being offered the licence."

ComReg chairwoman Isolde Goggin said the interest in the licence reflected improving confidence in the telecoms sector.

"The award of an additional licence provides an opportunity to enhance competition and provide consumers with greater choice," she said.

ComReg now has to formally offer the licence to Smart. Under its terms, coverage will have to stretch to at least 53 per cent of the population by by 2011. This is equivalent to the five cities.

The winning company's chief executive, Oisín Fanning, said Smart was delighted with the news.

Smart will have to develop its own network, at an estimated cost of €200 million. The company has signed up Chinese-based multi-national Huawei as its technology partner.

Mr Fanning said yesterday that Huawei's involvement was an important factor in winning the licence. His statement indicated that Smart would be working with other strategic partners in rolling out the technology.

Earlier this year the company joined forces with Virgin Mobile to launch an unsuccessful bid for mobile operator Meteor, one of its rivals for the 3G licence.

This month it raised €55 million from financial institutions. The company earmarked some of the cash for specific purposes, but said that some of it would be used to fund future capital investment.

It is unlikely to go back to the capital markets so soon after completing its fund raising.

Smart's competitors both said they were disappointed yesterday. Eircom is set to buy Meteor for €420 million, subject to Competition Authority approval.

However, both companies made separate bids for the 3G licence, even though it would have ended up in the same hands had ComReg chosen either company over Smart.

An Eircom spokesman yesterday said the company would review ComReg's decision. He said that Eircom was still determined to enter the 3G market, irrespective of the regulator's decision.

A Meteor spokesman also said that the company would enter the 3G market, probably as a virtual operator offering services through somebody else's network.