AT least two new mobile phone licences could be issued by next April.

A competition for the licences will be launched before the end of the year.

The newly-established Office of the Director of Tele-communications has advertised for consultants to run the competition for awarding the licences.

The advertisement, which has appeared in a European journal, is inviting tenders for designing and running the application process. Companies are also being asked to tender for a licence to run in-flight telephones.

Also included in the competition is an invitation to tender for paging services.

It is believed that licences, known as DCS-1800 licences, should be awarded by next March. The advertisement which appeared in the Tenders Electronic Daily, an( EU journal, says the duration of each consultancy contract will be around six months.

Last night the director's office said the number of licences to be awarded has not yet been finalised, but it is hoped the competition would result in the issue of "at least two" new licences.

Among the companies expected to apply is Orange, a telecommunications company which runs a similar service in Britain.

The DCS-1800 system uses similar technology to the existing microwave technology used by the current mobile phone operators, Esat Digifone and Eircell.

However, it is not as sophisticated at transmitting data as the GSM systems. The phones are designed to operate mainly within large urban areas.

Once the new operators come on-stream, the mobile phone market is expected to become far more competitive and should result in the kind of intense competition to win customers that happened in Britain. This included free weekend calls and handsets.

It is still unclear what the licences will cost. A cap of Pounds 15 million was put on the second mobile licence, which Digifone was awarded when the former minister, Mr Michael Lowry, was in government.

Eircell will be in a strong position to fend off competition, but the pressure is now on Esat Digifone to grow its market very quickly.

Eircell, which has been criticised for growing its market share at the expense of its service, boasts around 300,000 subscribers. Digifone is said to have in excess of 25,000 subscribers.

Although some observers feel that Digifone is not doing as well as predicted, it is said to be satisfied with its progress to date.

Recently, Telecom chief executive Mr Alfie Kane said few Eircell customers had moved to Digifone. Market penetration, ie. the number of mobile phone users in the State, is still only running at around 9 per cent. In Sweden, for example, mobile phone penetration has reached 30 per cent.

Mr Kane said earlier this month that mobile phone tariffs would only begin to fall radically when other competitors entered the market. It would also cause a "buzz" in the marketplace.

The tenders must be submitted to the office of the Director of Tele- communications Regulation in Dublin by August 1st.