Hutchison wins Irish 3G gig

O2 and Vodafone Ireland have both lost out in their bid for the top third-generation mobile licence in Ireland to newcomer Hutchison Whampoa, Louise Carroll writes.

The one bidder for an Irish 3G licence that does not currently operate a network in the Republic, Hutchison Whampoa, was awarded the desired A licence on Tuesday.

The Office of the Director of Telecommunications Regulation said it chose to award the licence to the Hong-Kong based company because its application was strong on promotion of competition, MVNO (mobile virtual network operator) access and quality of service.

"I think it's very good news that Hutchison has got the licence," Enda Hardiman, managing partner of consultancy Hardiman Telecommuncations told ElectricNews.Net. "Being a new operator, Hutchison has a strong incentive to roll out new and advanced services.

The other two operators, O2 and Vodafone, would probably be more cautious because they would be seeking to maximise their return on investment made to date by deploying GPRS services in advance of 3G proper. Hutchison conversely will need to differentiate strongly in order to attract high-paying customers from the current incumbents," he added.

Hutchison Whampoa will pay EUR27 million for the A licence, which will run for 20 years. The A licence provides for 80 percent population coverage and potentially extra spectrum for enabling MVNO services.

New market entrants such as Hutchison were offered additional spectrum by the regulator "in order to level the playing field with incumbent operators who will have an inherent advantage in rolling out 3G networks," the ODTR has said in a statement.

The telecoms regulator has also indicated that new entrants, like Hutchison, should be granted national roaming facilities by existing operators of Irish GSM operators. The regulator hopes to encourage site and mast sharing and where possible to ensure rapid roll out.

Although the ODTR approved of Hutchison's A licence application, things did not run as smoothly in the B licence competition. The ODTR was disappointed that only two operators bid for the three B licences on offer, which cost EUR74 million each and are required to cover 53 percent of the population.

Hutchison now has five days to respond to the offer of the A licence. Vodafone and O2 are both expected to secure B licences, and the lack of a third bidder indicates that the government will lose out on at least EUR44 million in the upfront licence fee. It was hoped that Meteor or Orange would bid for the third B licence, but the collapse of the telecoms market quelled the competition for 3G licences in Ireland.

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