Telecom to compete in North market

Telecom Eireann is to invest £50 million to set up a new company which will compete in the telecommunications market in Northern Ireland.

The company, which will trade as Telecom Ireland, will begin operations next month and eventually employ up to 500 people. Telecom Eireann said it would provide a full range of telecommunications service to meet the needs of corporate and residential customers.

Northern Ireland, like Britain, has one of the most liberalised markets in the world. However, on the fixed-line side, the major player is still British Telecom, with US cable group NTL, trading as Cabletel in Northern Ireland, making inroads into the market.

Telecom's chief executive Mr Alfie Kane said entering the Northern Ireland market made sense. "We are very familiar with the market, it has strong growth potential and has relatively few competing players at present."

Mr Kane said Telecom Ireland would differentiate itself in the market place by providing premium value-added products and services at very competitive prices.

It is understood that Telecom will put in some backbone network and switching platforms but will do a deal with another operator to give it local access. This is most likely to be British Telecom which already delivers its calls from the Republic to Northern Ireland. The company said it would compete with the existing players and pledged that, in many cases, its services would be cheaper.

Mr Kane said the investment was "a further indication of our intention to compete successfully in liberalised telecommunications markets". He said Telecom's strategy was to maximise its market share following the opening up of full competition in December and to seek out investment opportunities in core related activities both in Ireland and abroad.

"This announcement is a solid first step in that direction," he added. The Minister for Public Enterprise Ms O'Rourke said it was a very significant development for Telecom "coming at a time when we are beginning to see the tangible rewards of closer co-operation between North and South".

She said that closer co-operation "is evident from my recent meeting with the Secretary of State Dr Mo Mowlam in Dublin where projects such as a NorthSouth digital corridor were advanced".

The new company, which will have its headquarters in Belfast, is currently recruiting a management team including a chief executive. It will employ 70 people in its first year.