Hutchison 3G Ireland has shortlisted Esat BT and Eircom for a contract worth more than €250 million to build and operate its third-generation (3G) mobile network.
The company will use the network to provide users with a range of 3G services from video conferencing to location-based services on mobile devices.
Eircom and Esat BT were competing against US firm Flextronics, which has a major network services arm with headquarters in Stockholm, Sweden, industry sources said yesterday.
Crown Castle, the world's biggest tower operator, is also believed to be taking part in the competition, although it may have decided to join Esat BT's bid
It is understood ESB Telecom, a division of the State electricity company, has also signed a letter of intent with Esat BT to partner with the telecoms firm if it wins.
ESB has committed to provide its portfolio of 400 tower sites and national fibre backbone to complement Esat BT's nationwide network to support the firm's bid.
Hutchison, one of three successful bidders for 3G mobile licences in the Republic, is planning to outsource the management of its network.
Its request for tender, issued six weeks ago, asks bidders to propose how they would build out, maintain and manage Hutchison's 3G network.
But it is unclear the extent to which Hutchison will outsource management of its mobile network, with some sources believing it may just outsource management of its fibre and towers. This would enable it to retain control over its network while reducing costs.
Hutchison has also reserved the right to divide the contract into two or three parts by awarding separate geographical segments of its network to different bidders.
Because Hutchison must introduce at least a limited 3G mobile service in the Republic before January 1st, 2004, it will have to award the contract shortly.
A spokesman for Hutchison 3G UK confirmed yesterday the tender was ongoing but refused to give any details of the process due to commercial sensitivities.
Hutchison 3G UK, a subsidiary of the Hong-Kong-based conglomerate Hutchison Whampoa, plans to set up the first British 3G mobile phone service in March.
It has spent hundreds of millions of euro building out its 3G network across Britain and has begun work on its network in Northern Ireland. However, Hutchison has had technical problems with its UK service and has twice delayed its 3G launch.
Esat BT, Eircom and ESB all refused to comment yesterday on whether they had submitted bids for the Hutchison contract.
It is possible that if one of the international bidders for the Hutchison contract wins the competition, they will have to seek an Irish partner to deliver access to towers and sites.
It is understood two US bidders Fluor Daniel, a division of Fluor Corporation, a major engineering, maintenance services firm, and Wi Fi are not part of Hutchison's most recent shortlist.
The two shortlisted international bidders Crown Castle and Flextronics have been operating in the Republic for some time.
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