ITG accuses Eircell of abusing dominant market position

The ITG telecommunications group has accused Eircell of abusing its dominant position in the market through refusing to supply a code system to allow ITG sell Eircell airtime to mobile phone users from retail outlets in the State.

Mr Justice O Caoimh is being asked by ITG, which operates through seven principal subsidiary companies in Ireland and the UK, for an order restraining Eircell from refusing to supply its electronic prepaid vouchers for mobile phones to ITG. Alternatively, it wants an order directing Eircell to provide it with the vouchers on terms similar to those under which Eircell makes the vouchers available to An Post and others.

In court yesterday, Mr Michael Collins SC, for ITG, said terminals located in retail outlets print out a piece of paper (a pre-paid voucher) containing a code and sold this to a customer who then entered the code into their mobile phone. Mr Collins said his company sold these terminals to retail outlets and already had an agreement with Esat Digfone to purchase Esat's pre-paid vouchers. His clients wanted to buy the "codes" from Eircell as well. His complaint was that Eircell was refusing to sell ITG the codes.

He argued Eircell's failure to do so constituted an abuse of its dominant position.

Eircell had put out to tender a contract for the installation of terminals throughout the State. ITG tendered and did not get it. An Post was the successful candidate and was now going to have terminals in its post offices throughout the State to provide Eircell pre-paid vouchers.

An Post already had the Esat prepaid voucher facility and, over the next several months, would install about 4,000 terminals. ITG has 1,500 terminals in retail outlets at present.

Mr Collins said it appeared the contract with An Post was not yet signed. There appeared to be a difference between An Post and Eircell whether the contract was exclusive and the reality was Eircell was treating it as exclusive. ITG was not objecting to what An Post was doing but ITG wanted to be able to compete with them by being able to have both Esat and Eircell facilities and to b e able to buy from Eircell on the same terms as An Post.

In an affidavit, Mr John Nagle, chief executive of ITG, said the installation of the 1,500 new terminals by his company throughout the State was a significant new business development. The terminals had a variety of uses for a retailer but the most important was as a method of electronic distribution of top up airtime for mobile phones rather than distributing by means of physical cards.

It was of crucial importance to ITG that it should obtain Eircell vouchers for electronic distribution and that it should be able to sell both Eircell and Esat top-up vouchers through its terminals. ITG had on numerous occasions requested Eircell to supply its pre-paid vouchers by electronic means but to no avail.

In August 1999, following a suggestion from Mr Jereon Visser, director of the consumer business unit at Eircell, Mr Nagle said he set out ITG's proposals to offer top-up services via Eircell. He was told by another Eircell executive, Mr Brian Sheridan, in November 1999 that Eircell had decided to formalise the process "by way of a private tender" and asked ITG to submit a bid. In April this year, ITG was told An Post was successful.

Mr Nagle said ITG must be entitled to purchase such vouchers from Eircell in the same manner as thousands of retailers throughout the State.