Meridian needs no licence, court rules

A high Court judge yesterday found that Meridian Communications Ltd, a service provider which purchased mobile phone air time at a discount from Eircell and then sold it on, does not need a licence in order to carry on such activities.

But Mr Justice O'Higgins also concluded that Meridian, and its wholly-owned subsidiary Cellular 3, had no right to renewal of its airtime purchase contract with Eircell when certain essential items such as price and duration were missing. At most there was an agreement between the parties which was not legally binding, he found.

The judge rejected a claim by Meridian and Cellular 3 for a declaration that Eircell was estopped from terminating the air time discount agreement.

Meridian and Cellular 3, with registered offices at Merchants Quay, Dublin, are seeking damages from Eircell Ltd, with registered offices at Richview Office Park, Clonskeagh, over the termination of the agreement. Meridian has alleged that Eircell was seeking to put it out of business because Eircell wants to maintain its dominant position in the mobile phone market.

Yesterday's findings by Mr Justice O'Higgins came during the course of an action which began last February and has now been at hearing for 35 days. The hearing adjourned yesterday and resumes on May 2nd.

Eircell had argued that Meridian and Cellular required a licence to provide their services. However, the judge said the services carried on Meridian and Cellular 3 were less than those which required licensing. They did not even amount to the provision of such services as were covered by an EU Directive but were something less. Neither Meridian nor Cellular were in a position to establish radio communications to a mobile user. They might facilitate and enable communications but their service could not be said to consist of provision of communications.

Neither did Meridian's service of reselling air time come within the relevant section of the 1983 Postal and Telecommunications Service Act as amended by 1988 Licensing Regulations which required certain activities to be licensed.

In finding that Meridian and Eircell had not concluded an agreement, subject to certain provisions, for the renewal of the expired airtime purchase contract, the judge said the amount of discount, the duration of any such agreement and the presence or absence of other clauses were all subject to agreement. When such vital terms were missing, there was no concluded agreement

Rejecting Meridian's contention that only price and agreement duration remained to be negotiated, the judge said that even if he was mistaken in this finding, the ingredients of price and duration were so essential to the making of the agreement that their absence led him to conclude that there was no agreement made.

"Thus, in the present case, there was no right to renewal of a contract when the essential terms were omitted. At most there was an agreement which is not legally binding," the judge said.

After the decision, Mr Maurice Collins, for Eircell, said his client was extremely concerned about certain aspects of a recent promotional campaign undertaken by Cellular 3 and had written to the company expressing these concerns, so far without reply.

Among their concerns were inaccurate comments contained in a press release issued by McGovern Public Relations on behalf of the plaintiffs to the effect that there was lack of competition in the market place. This was something that was vigorously denied by Eircell.

There were also comments made by a Meridian executive in the press on matters which should not be mentioned except in the context of the trial of this action.

Mr Richard Nesbitt SC, for the plaintiffs, said competition in the telecommunications industry was something that was mentioned every day in the press.

Mr Justice O'Higgins said while there was no motion for contempt before the court, he would have no hesitation in dealing with such a motion were it presented.