Telecoms firm Spirit is subletting airtime rented by a rival company, Cellular 3, from Eircell in an effort to enter the mobile market. Its move comes despite an unresolved legal action between Cellular 3 and Eircell, which has sought to terminate the rental contract.
Spirit said it was aiming to secure 35,000 mobile customers on contract by the end of the year for a service launched yesterday. The company claimed the rates it offered were more than 10 per cent cheaper than those of Eircell and Esat Digifone.
Its chief executive, Mr David Ryan, said it had entered dialogue with Meteor, which held the third mobile licence, aimed at securing airtime directly from its network once operational at the end of the year.
Owned by Meridian Communications, Cellular 3 claims to have secured 15,000 mobile phone contracts since launching its "Imag!ne" service in April - bringing its total to 20,000.
This service uses discounted airtime rented from Eircell on the same contract Cellular uses to secure the time it sells to Spirit, which is owned by Interoute Telecommunications. Cellular said in April that it would secure around 100,000 customers by the end of the year.
Questioned about launching a product dependent on a disputed contract, Mr Ryan said: "There is a commercial risk for us. If something went AWOL [absent without leave] between `Imag!ine' and Eircell, we would be in difficulty. But I don't perceive it going AWOL. There is very little chance that anything will go wrong as far as I am concerned."
Spirit had no plans to apply for a 3G licence from the Director of Telecommunications Regulation, Ms Etain Doyle, according to Mr Ryan. "Owning mobile networks is of little value at this time. The real value is owning and acquiring the customer and leveraging the value that is with the customer," he said.
Spirit, which claims 78,000 residential telephone customers, expects to sign a distribution contract with a "major retail chain" shortly, Mr Ryan added.
The company said its 100-minute monthly option would cost customers £32.67 (€41.48) including VAT. It claimed this was 10 per cent less than Eircell's rate and 16 per cent less than the rate charged by Esat Digifone.
Mr Ryan claimed Ms Doyle had not supported companies which sought to purchase airtime from Eircell and Esat Digifone. Ms Doyle published a paper on July 31st which said airtime resale was a "commercial issue" for the operators and that regulatory action was not warranted.
Actions taken by Cellular 3 against Eircell, which is owned by Eircom, are still before the courts. In April, the High Court ruled that Cellular did not need a licence to offer its service and added that Eircell had no contractual obligation to renew its volume discount agreement. While this lapsed at the end of last year, it still stands pending hearings on competition elements of the case.
