Time to get back to providing a service

SO what's all the fuss about? There has been a lot of heat generated by the controversy over the granting of the second mobile phone licence, but so far nothing to prove that the process was not conducted properly. It has been open to the losing consortiums, if they really think something was wrong, to seek a judicial review of the licence; none has yet done so.

Nor have they produced any evidence of a serious mis-handling of the bidding process by the responsible Government officials. Last night, one consortium - Persona - said it was investigating the possibility of a complaint to the EU Commission, but it is not clear at all just what Brussels would be looking at.

It is no coincidence that the issue has surfaced again just before the winning consortium of Esat Digifone is due to sign the licence. It has finally grabbed the attention of some Opposition politicians, who have used Dail privilege to air some of the allegations which have been whispered around town for some time.

The latest controversy over the licence has centred on the Government's decision to cap the fee at £15 million.

This appears to have been done partly to head off any complaint from the EU Commission - which has not been in favour of open auctions - and partly so as not to have to levy too high a charge on Telecom Eireann. In order to "level the playing field" the Government is now levying a £10 million charge on Telecom Eireann.

There are still some questions about why the Department cancelled the first closing date for the licence at such short notice, to sort this issue out. Also, Telecom Eireann is the only existing operator in the EU so far to have to pay a levy on the introduction of competition. The Government could arguably have got more from the winning bidder without having to increase the levy paid by Telecom Eireann.

However, once the ground rules were set, all the bidders were playing on the same pitch and the key issues of the business plans on offer moved centre stage.

Mr Lowry's officials state quite clearly that Esat Digifone simply scored higher than the rest and was awarded the licence.

While bigger international companies were in the field, perhaps Esat Digifone concentrated on meeting the criteria and did not allow itself to get distracted into offering attractive but irrelevant add-ons.

A number of the losing consortiums were promising jobs and investment in areas not related to the licence at all. But with consultants and civil servants examining the issue, these "goodies" counted for nothing.

The negotiations to actually sign the licence have dragged on for some time. But Esat chairman Denis O'Brien insists that the finances are in place, a matter on which the Department will want to be satisfied before finally signing off.

Esat Digifone is 40 per cent owned by Esat Telecom and 40 per cent by Telenor of Norway. It should also announce the beneficial ownership of the remaining 20 per cent, which is being held by Mr Dermot Desmond's International Underwriting and Investment Company.

However, provided Esat Digifone has satisfied the Department that it is ready to go, then the sooner the concentration turns back to providing a top class competitor to Telecom Eireann's Eircell the better.