Mobile phone firms O2 and Vodafone will have to open their networks for use by competitors under new rules proposed by the Commission for Communications Regulation (ComReg).
The regulations, which were announced by ComReg yesterday, should enable a range of firms to gain a foothold in the Irish market as "virtual operators", which would increase competition.
Virtual operators are firms that do not own a mobile phone network but seek to provide a service by piggybacking on the networks that belong to other companies.
Meteor may benefit by using the ruling to force a national roaming deal with one of the other two mobile network operators, which would extend its coverage across the Republic.
Eircom - which is already seeking to become a virtual operator - may also benefit from the ruling, although O2 and Vodafone will seek to oppose its implementation for as long as possible.
Vodafone Ireland chief executive Mr Paul Donovan said there were fundamental flaws in the decision and the firm would not accept "ill-considered analysis".
He accused the regulator of wanting to increase regulation and the power of its office.
The regulations have been proposed in response to a major review of the Irish mobile phone market by ComReg. This review found that the market for mobile phone services in Ireland has one of the highest concentrations within the European Union.
ComReg said its consultation found that the prices of the two main operators had not changed significantly following the arrival of Meteor into the market. ARPU (average revenue per user) rates are also significantly higher than ARPU rates earned in other EU states.
"While operators have claimed that higher ARPUs are the result of higher usage of mobile phones by Irish consumers, ComReg has found the evidence for this inconclusive," it said.
O2 and Vodafone, which together hold 95 per cent market share, have consistently argued that Irish people spend more on mobile phone services than other Europeans because they talk more on their mobile phones.
However, consumer groups have argued that there is a duopoly in the mobile phone market that has enabled the two dominant firms maintain high prices. This recently led the Oireachtas Communications Committee to undertake its own investigation into the mobile market.
In a significant development, ComReg's ruling concentrates on directing action at a wholesale level rather than setting a retail price cap on Vodafone and O2. Legal sources said last night that action at a retail level would have been harder to justify to the European Commission than action at the wholesale level.
ALTO, a lobby group representing fixed-line operators other than Eircom, welcomed the decision last night as a significant boost to competition. The group said the ruling should be implemented as soon as possible to reduce high mobile phone prices.
Meanwhile, in a separate decision yesterday, ComReg found that Eircom had breached a code of conduct governing competition in the home phone market after an investigation into Eircom's advertising practice following a complaint from one of its rivals, Cinergi Telecom. Cinergi claimed Eircom misled consumers about its minimum call prices in an advertisement published last year.
ComReg found Eircom had misled consumers by not updating the rates charged in its advertisement. But it said it would not pursue the matter further because Eircom had rectified the matter but it would continue to monitor the situation.
