Eircell hostile to service provider, High Court told

A Telecom Eireann subsidiary is seeking to put a telecommunications service provider, Meridian Communications Ltd, out of business, it has been claimed at the High Court.

Mr John Gordon SC, for Meridian, said yesterday that Eircell was abusing its dominant position in the mobile phone market and exhibiting "a general attitude of hostility" to Meridian's business.

Mr Dominic Dowling, solicitor for Meridian, alleged in a letter read to the court that Eircell was worried that Meridian would expose the "secret and unfair commercial practices in which Eircell have deliberately engaged over the years". He alleged "preferential and secret terms and conditions have been granted to larger customers (including Telecom Eireann) at the expense of the smaller consumer".

Meridian and its subsidiary Cellular 3 Telecommunications Ltd have applied for a number of orders against Eircell, including restraining it from terminating next November a volume discount agreement with Meridian and directing it to operate that agreement in a fair and proper manner pending the outcome of proceedings between them. It also wants declarations that Eircell is abusing its dominant position and seeks damages for breach of contract, injurious falsehood and inducement to breach of contract.

Eircell denies the claims and says Meridian is not entitled to the reliefs sought.

Mr Gordon said the mobile phone business started in the mid-1980s. The first licence went to Eircell about 1985 and Esat Digifone got a licence in 1997. Eir cell and Esat were network operators while companies such as Meridian were service providers.

In September 1997 Meridian reached a volume discount agreement with Eircell allowing it to sell on air time purchased with the discount. It was renewed in November 1998 until November 17th, 1999. Eircell had represented it would not terminate the agreement. It was also obliged to consider positively an application for ongoing service. Meridian had proceeded on that basis and expanded its business.

Relations between the two companies ran into serious difficulties last January when Eircell sought to frustrate the processing of forms transferred to Eircell for the purpose of transferring new customers to Meridian. Eircell initially argued that Meridian was not entitled under the terms to sell on air time and then said it was not renewing the volume discount agreement with Meridian when it expired in November.

Meridian contended Eircell had wrongfully asserted it was entitled to stop dealing with Meridian in November and was wrongly attempting to frustrate Meridian's business. This could only be for the purpose of putting Meridian out of business.

The hearing before Miss Justice Carroll resumes tomorrow.