Eircell may develop telecoms services outside its core mobile offering if continuing negotiations between Eircom and Vodafone succeed.
The company said yesterday it was considering applying for one of two broadband fixed wireless access licences due to be issued by telecoms regulator Ms Etain Doyle early next year.
These licences enable telecom companies to beam high-speed Internet services into buildings and are used as alternative means of providing broadband services without using fixed line networks.
Eircom already holds a similar broadband licence which it won following a competition held this summer. Therefore, a successful application by Eircell would place the two operators in direct competition, following any takeover by Vodafone.
Along with the mobile licence, Eircell holds a general telecom licence enabling it to offer customers a range of services.
Under the rules of the proposed "beauty contest" for the two broadband licences, a firm which already holds a similar licence is not allowed to apply for additional licences. Current licensees include Eircom, Esat Telecom, Formus and Chorus.
But Ms Doyle moved yesterday to clear this obstacle by ruling that Eircell should be allowed to make a conditional application for a licence.
She said this application would be made on condition that Eircom no longer held a stake in Eircell by March 31st 2000 - when the licences are due to be issued.
An Eircell spokeswoman said the company had not decided whether to apply for a licence but had merely inquired if it would be allowed to do so. Eircom declined to comment.
A decision by a Vodafone-owned company to pursue non-mobile assets would be a "curious thing to do", according to Dr Chris Doyle, a UK telecoms analyst with Charles River Associates.
"Vodafone is a pure play mobile operator and it would be strange for it to move into a non-mobile area in the Republic," he said.
But a decision by a demerged Eircell, backed by Vodafone's financial muscle, to compete in other sectors of the telecom market, would not be welcomed by Eircom.
It would also add another ironic twist to the firm's takeover negotiations with Vodafone.
