ComReg faces €5m bill as mobile firms win appeal

The telecommunications regulator, ComReg, is facing an estimated €5 million legal bill following its second failure to defend an appeal against one of its decisions.

Mobile operators Vodafone, O2 and Meteor this week, began a challenge to a ComReg ruling that they have dominant positions in the Irish market. The hearing was before the Electronic Communications Appeals Panel (Ecap), a new body that has the power to overturn ComReg rulings on appeal where it believes there are grounds for doing so. Its rulings are binding.

The appeal ended two days early yesterday when ComReg agreed with the three challengers the panel could annul the ruling.

The regulator has also agreed to pick up the challengers' legal costs, which industry estimates place at close to €5 million.

If ComReg's ruling had stood, the regulator would have been able to take a number of steps against the companies involved, including fixing the prices that they charge consumers for calls and other services. As a result of its ruling being annulled, it cannot now take these steps against the companies involved.

Vodafone and O2 yesterday issued statements welcoming the result. Vodafone's strategy director said the Irish market was extremely competitive.

"Ireland already has four mobile licence holders - with another poised to enter - addressing a market of four million people, a competitive ratio not seen anywhere else in Europe," he said.

The appeal was the second of its kind heard by the panel, and it was also the second time that ComReg has not succeeded in defending its original ruling.

Two months ago, Ecap ruled that ComReg was wrong to brand Hutchison, which operates third generation mobile network 3, as a dominant player in part of its market. ComReg ruled that 3 had the power to fix the prices it charged other operators for calls from their customers to subscribers to its network. Ecap quashed this, arguing that the regulator's analysis was faulty and failed to take into account the fact that Hutchison was a new entrant to the Irish market.

Earlier this year, the High Court also shot down a ComReg ruling governing how fixed-line player Eircom should open up its networks to its competitors.

The court ruled that ComReg was wrong in not allowing Eircom its right to appeal the ruling to Ecap. ComReg subsequently withdrew the direction.

ComReg's approach to procedures also came under fire during the first day of this week's appeal.

Senior counsel for Vodafone, Donal O'Donnell, argued the ruling was flawed because ComReg had not given the companies an opportunity to answer key evidence against them.

Mr O'Donnell said that the ruling breached fair procedures because the companies were not given the chance to respond to a claim that they "tacitly colluded" with each other to keep competitors out of the Irish market.