An Irish woman's social, political and domestic commentary
Tuesday, January 20, 2004  

More Moriarty - The Allegations

Allegation No. 1

When the tender document was originally released the licence was being effectively auctioned. The bidder was to name the fee that they were prepared to pay for the licence. One week before the bids were due in, the Dept. changed the document to put a cap on the licence fee.

The Conspiracy

Denis O'Brien's cash strapped Esat couldn't afford to pay the estimated 55m it would take to buy the licence. (Some would have you believe it would take 100m). Michael Lowry therefore forced the bid team to cap the licence fee at 15m so Denis could afford it.

The Truth

A few months previously Italy had conducted their second GSM licence competition. The bidders took part in the effective auction. DGIV, the European Commission's section on competition, ruled that it was unfair that the second licence holder should have to pay a huge fee for a licence which the incumbent i.e. the state phone company, got for nothing. They ruled that whatever the second licencee paid; the first licence holder should also pay.

Cue nightmare scenario for Eircell. If the winner of the GSM competition paid 50m+ then Eircell would have to cough up the same. The civil servants realised that
a) the state would end up earning nothing from the competition since they also owned Eircell at the time
b) their mates in Eircell formerly Dept Post & Telegraph would have a harder time competing in the market without much needed dosh.

Soooo they capped the licence fee and Eircell paid the 15m also.

Has this been explained anywhere in the Irish media. No. Why not? How about a conspiracy theory on that?

posted by Sarah | 17:28 0 comments
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