SMART Win 4th 3G License

Tom Young

Word up.

Appears SMART have managed to clench license number four.

http://www.comreg.ie/_fileupload/publications/PR161105.pdf

Let's see what plays next.

Guess eircom and Meteor might be miffed about this one.

Thomas.

OfflerCrocGod

Tom Young wrote:

Guess eircom and Meteor might be miffed about this one.

Ye in 5 years time maybe Smart will be able to roll out BB using 3G phones that could compare with what we have right now - at least it will cover, oh, about 50% of the country about 50% of the time. Brilliant.

Tom Young

OfflerCrocGod wrote:

Ye in 5 years time maybe Smart will be able to roll out BB using 3G phones that could compare with what we have right now - at least it will cover, oh, about 50% of the country about 50% of the time. Brilliant.

I think you're missing the point. For once, someone without massively entrenched vested interests sweep the carpet out from underneath the main contenders. I say well done.

Won't buy shares though.

damien

So who'll be buying Smart next year?

Sponge Bob

And will Eircom buy Meteor now ???

Eircom and Meteor were the other two (losing) bidders for the 3G licence . The Meteor 2g licence expires in 13 years (end 2018 IIRC) after which Meteor are no longer licenced to provide a Mobile Network in Ireland and are essentially worthless .

Sarsfield

Sponge Bob wrote:

And will Eircom buy Meteor now ???

Swisscom are also nervous about upsetting their friends in Vodafone. Owning Meteor might do just that, so this could get interesting (and messy).

http://www.rte.ie/business/2005/1116/swisscom.html

halenger

Not sure how useless they'll be. Vodafone and O2 are still being forced to open their networks, aren't they?

Will that apply to their 3G networks? It's a shame anyway. I'd have liked to see Meteor getting 3G up and running.

I'm interested in the "will Eircom buy Meteor" point. It will really depend on how much Eircom are willing to get into it. I'm sure they can still compete. Are people flocking from Meteor to Vodafone/O2/3 because of 3G? I wouldn't think so.

halenger

Sarsfield wrote:

Swisscom are also nervous about upsetting their friends in Vodafone. Owning Meteor might do just that, so this could get interesting (and messy).

http://www.rte.ie/business/2005/1116/swisscom.html

Hmm... I didn't know about that. If Eircom are happy with the Swisscom takeover then this may be used as the reason to not buy Meteor and that doesn't really bode well.

Though with Smart getting the 3G licence they could possibly re-bid for Meteor. It would give them a mobile base and a good starting point. It may get quite drawn out though. As a Meteor customer I'd just like to know now - also I'm very impatient.

Sponge Bob

halenger wrote:

Vodafone and O2 are still being forced to open their networks, aren't they?

No, not after Comreg were found very wanting in their analysis of the mobile market .

3 Ireland must provide Virtual Operator space on their network according to their licence , Eircom could go to them instead .

OfflerCrocGod

halenger wrote:

I'm sure they can still compete. Are people flocking from Meteor to Vodafone/O2/3 because of 3G? I wouldn't think so.

Not yet, but in 3 years time? No 3G, no future.

Cabaal

OfflerCrocGod wrote:

Not yet, but in 3 years time? No 3G, no future.

Oh man this made my day
Eircom/Meteor are I'm sure abit annoyed
I guess it has a revenge factor considering Smart did'ent manage to get Meteor

Cabaal

OfflerCrocGod wrote:

Not yet, but in 3 years time? No 3G, no future.

Agreed to a certain point, the averge joe doesn't care but when all the latest "cool" phones are sold as 3G we'll see how many kids and people in their twenties stay with meteor

TimTim

Cabaal wrote:

Agreed to a certain point, the averge joe doesn't care but when all the latest "cool" phones are sold as 3G we'll see how many kids and people in their twenties stay with meteor

That free text deal has a alot of my brothers friends switching back to meteor. Sure most of them are 14 year old immature kids, but its still getting meteor business.

Cabaal

TimTim wrote:

That free text deal has a alot of my brothers friends switching back to meteor. Sure most of them are 14 year old immature kids, but its still getting meteor business.

Not a sustainable business model as their loosing alot of money compared to other providers, its great and all but its certainly not going to continue forever

crawler

Hmmm...

Guys they have been offered a license - they now got to find the means to pay for it....and only then can they think about mast rentals, fibre, hardware, people etc etc.....having the likes of Vodafone, O2 and Hutch as your competitors can not be fun either....

That said though will make eircom unhappy....

TimTim

crawler wrote:

Hmmm...

Guys they have been offered a license - they now got to find the means to pay for it....and only then can they think about mast rentals, fibre, hardware, people etc etc.....having the likes of Vodafone, O2 and Hutch as your competitors can not be fun either....

That said though will make eircom unhappy....

Well if they were going to buy meteor I think they have the funds available to start their own mobile company now.

Plus the inital investment will be huge for any company starting up. Look at the citigroup report and it shows the costs of setting up an exchange for LLU and the mobile market in ireland is a very nice one to be in so I'm sure it won't be too long before the see a return on investment.

XDA

I'm sure i read in the paper yesterday that Smart raised 55 million euro in funding this week, now i guess we know why they needed to raise that much cash.

XDA

SeaSide

I see that Lord Tony can't bring himself to mention the license

crawler

XDA wrote:

I'm sure i read in the paper yesterday that Smart raised 55 million euro in funding this week, now i guess we know why they needed to raise that much cash.

XDA

55m!! rough back of fag packet calc would lead me to believe that they will need 300-400m to get it off the ground, though I am sure some friends in China will come up with some clever vendor finance for bit of kit. The license itself will cost over 100m...

That 55m is a bit odd - it's not real money - 10m of it will pay for the outstanding payment owed on the T50 which they bought last year, this will be to the Murtaghs, which kinda makes one understand why they under wrote the money in the first place There is also a debt for equity exchange....so not much left after that...the devil is in the detail...

As for buying Meteor, I dont think they ever wanted to buy it, they wanted to make sure that eircom paid the maximum amount for it - just playing silly Corporate games...

Not being negative, just facts.....I would love a 3G chunk of spectrum!

Cabaal

crawler wrote:

As for buying Meteor, I dont think they ever wanted to buy it, they wanted to make sure that eircom paid the maximum amount for it - just playing silly Corporate games...

Not being negative, just facts.....I would love a 3G chunk of spectrum!

Facts eh?
I believe you'll find your speculating, its very different from quoting facts

paulm17781

Were Smart not doing some venture with Virgin mobile? This could help get Smart Mobile started.

crawler

Cabaal wrote:

Facts eh?
I believe you'll find your speculating, its very different from quoting facts

My financial analysis of the 55m is correct - read the Smart interim report for June and read the report for the 55m structure just raised.

http://www.smarttelecom.ie/InterimResultsJune30th05.pdf

Also "Smart raised a total of EUR44.4 million by issuing around 150 million new ordinary shares at STG0.20 each to a number of financial institutions. It also agreed a debt equity conversion of EUR10.8 million . The company said that, as part of the fundraising, chief executive Oisin Fanning as well Brendan Murtagh and Patrick Curran will subscribe for 41,675,000 new ordinary shares for a total of EUR12.3 million. "



In fairness I did say "think" on the Meteor bid

Hornet

I am not sure if this news is good or bad for Smart.

If you look at the 3G market in Ireland then you find three multinational operators with deep pockets (Vodafone, Telefonica, 3). Two of them already have a strong customer base and the third ("3") has started offering services. All three have a huge amount of experience in the mobile phone sector as far as technical and commercial aspects are concerned.

Now there is a relatively small Irish company without much external backing who is already struggling financially AND technically AND on the customer support front. A company that promises a lot and advertises hugely, but hasn't followed up on many promises (e.g. broadband roll-out). This small company will now have to buy a licence and build a network for hundreds of millions so that they have a semi-acceptable coverage in 6 (!!) years. (The reason why many people held of using Meteor was the coverage or rather lack of it!)

The mobile phone market has reached a relatively high saturation level in Ireland and while the ARPU is very very high in comparison to other countries, the customer numbers won't increase significantly. Instead the competition and the entry of MVNOs (virtual operators) who will re-sell services from "3" will inflict some significant price pressure. So customers for Smart Mobile can really only come from the existing operators and taking customers away usually costs a lot of money.

Assuming Smart buys the license, they have to build a completely new skillset in the company (Virgin Mobile - as virtual operator - might be able to help on the sales, marketing and product side, but maybe not on the technical side). This will cost Smart HUGELY! With cost to build a network and support infrastructure, the cost to win customers and decreasing mobile phone charges, it could take a long long time to make some money.

If I had shares, I would sell them tomorrow - the share price made a jump up today and that is the best opportunity to sell. Otherwise the only rescue might be a take over, but who would want to take over a company that is competing with three heavy-weights and has to start from scratch with already big debts?

By the way, I am sure that Meteor and Eircom are shocked about the outcome and will do whatever they can to get either a 5th license or to delay Smart. But either way, Meteor will be able to re-sell 3G services from "3" to an existing customer base, so they are not in the same situation.

--Hornet

JTMan

WELL DONE SMART MOBILE - GREAT TO SEE EIRCOM LOSE THIS

Comreg have made the right decision for competition and investment in the Irish market.

crawler wrote:

My financial analysis of the 55m is correct - read the Smart interim report for June and read the report for the 55m structure just raised.

http://www.smarttelecom.ie/InterimResultsJune30th05.pdf

Also "Smart raised a total of EUR44.4 million by issuing around 150 million new ordinary shares at STG0.20 each to a number of financial institutions.

Smart Telecom PLC and Smart Mobile Ltd are 2 seperate companies (although some similar shareholders). The 55 million raised by Smart Telecom has nothing to do with the financing of Smart Mobile LTD.

cgarvey

ARPU is high, profit is high, usage is high, competition is non-existent. It wouldn't take much to shake the market up.. just someone with some balls to swallow short-term gain (which o2, meteor, vodafone and three are all striving for), versus long-term stability... Smart might have those balls, they might not. Time will tell. I think it're reasonable to suggest that if they don't have them, or grow them quickly they'll never make much money from this (because of market saturation, and their low coverage initially).. but with some financial backing (which mightn't be as hard to get as you'd think, especially with new buzz words like convergence), some MVNO and some balls, I think they have the capability to dramatically change the market, in a reasonably short term. Time will tell.

.cg

bk

If Smart buys the license, then Eircom will likely buy Smart, there are only 4 3G licenses, so Eircom/Meteor would be fairly shafted unless they went MVNO on 3's network and that isn't ideal.

So it mightn't necessarily be a good idea to sell your shares just yet.

Of course the whole Eircom / Meteor / Swisscom / Vodafone thing is just going to complicate things. If you thought the sale of NTL:Ireland to the Liberty Group was complicated and invloved a long investigation by the competition authority, well you haven't seen anything yet.