3 ComReg and Smart Stories in the papers

damien

http://www.timesonline.co.uk/article/0,,2095-2046905,00.html

BT guarantee could not save Smart

COMREG, the telecommunications regulator, withdrew its offer of a mobile telephone licence to AIM-listed Smart Telecom last week despite the presence of financial guarantees from BT, the British telecom operator.

The Sunday Times has learnt that BT signed a deal with Smart to build and roll out the mobile network, and was a signatory to the controversial draft performance bond that ComReg signalled was the reason for withdrawing the licence.

BT was one of three companies that gave bank guarantees to ComReg regarding the roll-out of Smart Telecom mobile network. Smart and Huawei Technologies, a Chinese equipment manufacturer, were the other signatories to the €100m bond.

ComReg withdrew its offer of the mobile permit last Monday night after it informed Smart that the performance bond was not “fit for purpose”. Smart applied for an injunction on Tuesday to prevent the issuing of the licence to another party pending a legal challenge to the ComReg decision.

The regulator insists on the existence of performance bonds so that it can call in financial penalties if the licence holder fails to hit targets in the building of the phone network.

Smart Telecom was awarded the final third generation (3G) mobile licence last November, when it surprisingly beat off rivals Eircom and Meteor. The other 3G licences were awarded to O2, Vodafone and 3 in a tender in 2003.

BT had come to an agreement where it would build out the network for Smart. The company has previously built out the third-generation network for 3.

It is believed that ComReg disallowed the draft performance bond submitted by Smart in mid-January and had set a deadline of January 30 to execute a suitable bond.

The court heard that Smart first threatened legal action on January 30, but deferred for a period of two weeks at the request of the regulator. During the two-week period, however, Smart claims that there was no attempt by ComReg to agree terms on the bond.

In an affidavit to the court last week, Smart’s chief operating officer, Ciaran Casey, said that he was “unaware of the extent of negotiations, if any, which (ComReg) has had with rival bidders”. He did not know if ComReg “was in a position to award the licence imminently to any such bidder”.

However, one industry source said he believed that the licence will now automatically revert to the second-placed bidder in the tender, either Eircom or Meteor. Eircom completed the purchase of Meteor after the 3G licence was awarded to Smart.

The withdrawal of the licence would mean that the mobile market would be limited to the current four players, O2, Vodafone, Meteor and 3. Ironically, Smart scored strongly in the tender as it would introduce greater competition into the mobile market

http://www.sbpost.ie/post/pages/p/story.aspx-qqqid=11977-qqqx=1.asp

ComReg refused to disclose whereabouts of executives

ComReg has refused to say whether its two most senior executives were on holiday or out of the country on business while crunch talks stalled on the withdrawal of Smart Telecom’s mobile phone licence.

Smart shares fell 20 per cent last Tuesday after it said the telecoms regulator had withdrawn its offer of the country’s last third generation (3G) licence in a dispute over a bank guarantee.

The company went to the High Court later that day to stop ComReg granting the licence to another company. A second hearing last Thursday was adjourned for two weeks after ComReg asked for more time to prepare its arguments.

The dispute centred on a €100 million bank guarantee that Smart was required to provide by January 30. The guarantee aimed to satisfy ComReg that Smart would meet specific targets for the rollout of its network. The court heard that ComReg told Smart on January 30 that it was unhappy with the guarantee, which had been submitted in draft form, and that the deadline would not be changed.

Smart consulted its lawyers immediately, but said it would refrain from taking legal action until February 10, to allow for talks between both sides. But it told the court, ComReg ‘‘did not engage in any meaningful consultation’’ between February 2 and February 10.

ComReg then told Smart on February 13, last Monday, that it would not be awarded the licence because it had failed to meet the required conditions.

A spokesman for ComReg refused to comment on the whereabouts of its chairman, Isolde Goggin, and fellow commissioner John Doherty, a former ComReg chairman, in the days leading up to February 10.

‘‘As part of their work, commissioners do have to travel, but, when necessary, they are in contact with the office,” he said.

He would not confirm whether Doherty attended a telecoms conference in Paris from February 7 to February 10, or whether Goggin was on annual leave. Smart was awarded the licence in November after beating off competition from Eircom and Meteor, its mobile subsidiary.

The decision was seen as a major upset, but ComReg said at the time that Smart was chosen because it would be a new entrant to the mobile market and its arrival would increase competition for consumers.

Smart has already handed over €56 million to ComReg to comply with the terms of the licence offer. It plans to spend over €200 million to roll out its mobile network, which will be the country’s fifth, after Vodafone, O2, 3 and Meteor.

http://www.sbpost.ie/post/pages/p/story.aspx-qqqid=11944-qqqx=1.asp

ComReg and eircom to makeup re: Smart licence

ComReg and Eircom, the original Tom and Jerry of the Irish telecoms sector, may be about to kiss and make up. The regulator has a long history of misfiring in its attempts to rein in Eircom’s mischief, but last week’s unexpected twist, when ComReg withdrew its offer of the country’s final 3G mobile phone licence from Smart Telecom, was welcome news for the former state monopoly.

Eircom’s top brass were crestfallen when Smart landed the licence last November.

ComReg’s decision to give Smart the nod, supposedly to increase competition in the telecoms market, shattered Eircom’s plans for a 3G network of its own. It was left facing tough negotiations with Vodafone, O2, 3 or even Smart to piggy-back on their networks to provide a 3G service to its customers.

But last week’s move opens the door again for Eircom. If Smart fails to convince the courts that ComReg should reinstate it as the licence holder, the regulator should then proceed to award the licence to one of the unsuccessful candidates.

Luckily for Eircom, the only two horses left are itself and Meteor, its recently-acquired mobile subsidiary. After years of antagonism between Eircom and the regulator, attitudes may soften if ComReg’s tough approach gives Eircom the licence it badly wanted. ComReg would also thank Eircom for saving its blushes after changing its mind on Smart’s suitability for the licence so soon after awarding it.

watty

It would be National scandal of Tribunal proportions if what Smart says is true.

bealtine

Finally comreg are seen for the incompetants that they obviously are...

Heads must roll over in Comreg Towers

Slutmonkey57b

So Comreg have removed a new entrant from the most highly-priced mobile arena in europe and are going to provide us with a classic case of Irish Competitive Tendering between Eircom and... Uhhh... Eircom.

What a ****ing joke.

This is now at the stage where questions have to be asked about the whereabouts or otherwise of brown envelopes, not the whereabouts of comissioners.

Sarsfield

I suppose there's no possibility whatsoever that Smart was in any way responsible by providing unsuitable or wooly guarantees as suggested by Comreg? None at all? So it's completely obvious that ComReg is the bad guy here?

Now I don't suggest that ComReg is wonderful or anything but are you not all jumping to conclusions blinded by a pathological hatred of ComReg & Eircom?

lucernarian

It had to happen sooner or later, ComReg publicly ending up with mud on its face. These stories of their shenanigans will reach the general public instead of the usuals of the IOFFL forum.

I wonder if Noel Dempsey will have anything to say about the 3G license or ComReg's executives??

damien

I would think right now we are seeing stories spun from Smart only. ComReg as usual has an aversion to telling the truth to the press and when cornered go dumb.

Sure they should have the benefit of the doubt but with 12 months of constantly fcking up decision after the decision people are just in the habit now of assuming the usual. ComReg muscle memory we should call it. Their culture of being opaque and spinning bullshít about how well things are have guaranteed these reactions.

Solair

Well if the Smart proposal does fall through there should be a re-opening of the competition considering that one of the candidates recently bought the other. Eircom shouldn't be allowed to enter as Eircom and Meteor.

cgarvey

To a reasonable thinking person, yes. I still have the feeling that ComReg will revert to the next inline, without a new process, despite the dramatic change in circumstances.

That's if Smart are, indeed, in breach of the original conditions.

Slutmonkey57b

Sarsfield wrote:

I suppose there's no possibility whatsoever that Smart was in any way responsible by providing unsuitable or wooly guarantees as suggested by Comreg? None at all? So it's completely obvious that ComReg is the bad guy here?

Now I don't suggest that ComReg is wonderful or anything but are you not all jumping to conclusions blinded by a pathological hatred of ComReg & Eircom?

Again, Comreg should have been able to analyse the bids properly BEFORE announcing the tender. If Smart's guarantees don't hold water, or they can't raise the funds, then Comreg would have found that out at an earlier stage. Either way, Comreg are now faced with a farce of their own making. Unfortunantly, its the consumer and taxpayer that will pay for it rather than the muppets who created the mess.