High Court blocks new mobile phone licence

The arrival of fresh competition in the mobile phone market has been delayed by a High Court decision which blocks the awarding of the third licence to the Meteor consortium.

Ms Justice Macken said the decision of Ms Etain Doyle, director of telecommunications regulation, to award the licence to Meteor was objectively biased and unreasonable.

The court challenge was taken by British mobile phone company Orange, the other bidder for the third licence.

The judge upheld Orange's contention that the process under which the licence was awarded was flawed. Ms Justice Macken also ruled that Ms Doyle's failure to give Orange adequate reasons for her decision was wrong in law.

The awarding of the licence was referred back to Ms Doyle by the judge for reconsideration. However, last night the director said she would appeal the decision, while Meteor also said that it was considering an appeal.

The bulk of the costs of Orange's 50-day High Court challenge, which began last March, were awarded to Orange against the director and Meteor. They are estimated at some £3 million.

The judgment, which strongly criticised the way Ms Doyle reached her decision, will be closely assessed by the Government, which established her office to police the rapidly growing telecommunications sector.

The Government had faced criticism from losing consortiums after it awarded the second mobile phone licence to Esat Digifone. Digifone has since emerged as a major and successful competitor to Eircell, which is owned by Eircom.

The third licence, awarded by the director in June 1998, was to provide a fresh impetus of competition into the mobile phone market. However, the court action had already delayed the launch of the new service and now future court action is in prospect.

Last night a company statement expressed its "deep disappointment" with the judgment and said an appeal to the Supreme Court was an option being considered.