Entrepreneur raises €12m to rebuild Imagine telecoms brand

Three years after watching his dream of creating an Irish virtual mobile operator die in the High Court, entrepreneur Seán Bolger has raised €12 million to rebuild the Imagine brand name.

Mr Bolger, one of the first entrepreneurs to take advantage of the deregulation of the telecoms industry in the Republic, is teaming up with British private equity firm Cazenove to fund his latest telecoms venture.

The Imagine Telecommunications Group will introduce fixed voice and broadband services over the next few months to consumers and businesses. It will also seek to re-enter the mobile industry as a virtual operator - a company that does not own a mobile network but leases airtime from established operators - says Mr Bolger, who admits that getting a deal could be tough.

In May 2001, Bolger's fledgling virtual operator, branded Imagine, was forced to stop supplying a mobile service to 20,000 users when it lost a crucial High Court case with Eircell, the mobile operator later taken over from Eircom by Vodafone. The firm had negotiated a value discount agreement with Eircom to buy airtime minutes at low cost but was forced to cancel this agreement by the larger firm.

Mr Bolger, who teamed up with former Waterford Crystal executive Brian O'Donohoe to launch the Imagine mobile brand, says that the mobile market is still not competitive.

"We want to create a pan-European mobile virtual operator and are already talking to firms in Europe," he says. "We are talking to the mobile operators in Ireland as well. It is only a matter of time before virtual operator deals begin to be struck here."

Mr Bolger's return to the telecoms arena after the demise of Imagine in 2001 began just a year later when he bought the former GTS telecoms business in Dublin from European telecom Ventelo.

In an ironic twist to the buy out, Bolger had originally founded this business in 1992 which he branded ITL. It was later sold to European operator GTS in a multimillion euro deal.

He renamed the firm Access Telecom and has proceeded to expand its customer base by signing affinity deals with large organisations. The most prominent deal struck by Access is a deal with the GAA, whereby members of the organisation can sign up for a telecoms service that promises to direct 15 per cent of their overall bill back to that member's GAA club.

Mr Bolger says that 5,000 customers are signed up for the service.

Access has a similar deal with Isme, the small business lobby group, and recently signed an affinity deal with the credit union movement, says Bolger.

"The key attractions for us are Seán's record, recent changes in the Irish market that open up new opportunities and the potential for growth," said Mr Paul Murray, an executive at Cazenove Private Equity. "We've put a substantial amount of money behind the company and are prepared to invest in the next stage of the firm's development."

Cazenove has taken a large minority stake in Imagine. Personal stakes are held by Mr Bolger, Mr O'Donohoe and other management.

The investment in Imagine closely follows a recovery in the global telecoms industry.

Mr Bolger says the investment will be used to develop the fixed business further to offer broadband services and VoIP (voice over internet protocol) shortly.

Money will also be spent strengthening the Imagine brand name and building a mobile operation if negotiations on becoming a virtual operator prove fruitful.

"Once one mobile network operator signs an MVNO [ mobile virtual network operator] deal, then it often happens that the floodgates open and the other network operators sign deals too," says Mr Bolger, who claims to be in advanced negotiations with several European operators about introducing a European MVNO.

However, resistance from O2, Vodafone and Meteor to any deal means the relaunch of the Imagine mobile brand may take longer than expected.