Cellular 3, the telecoms company which owns the Imagine mobile phone brand, will cease operations in Ireland within a month if its efforts to become a mobile virtual network operator fail and if it fails to secure a new discount agreement with a mobile operator.

Staff at Cellular 3 were put on full notice yesterday following the announcement.

"I can no longer get investors to continue to invest in the company without clarity," said managing director Mr Brian O'Donohoe. Last week, 140 staff and around 100 employees of agents were put on protective notice following a decision by Eircell to end an agreement under which Imagine had been buying and re-selling discounted airtime.

Cellular 3 had been involved in protracted negotiations to obtain a new volume agreement from Eircell since August 2000. Eircell withdrew the agreement earlier this month following a High Court judgment which ruled the company did not have a dominant position.

Mr O'Donohoe was critical of the telecoms regulator for her failure to resolve this dispute and to implement a framework for mobile virtual network operators. In the past, Cellular 3 said it was a mobile virtual network operator rather than a simple seller of other operators' airtime and that the regulator should intervene to support the company in commercial negotiations.

A spokeswoman for the regulator's office said, "This is a commercial dispute between Meridian [Cellular 3's owner] and Eircell. However, the regulator is the independent arbitrator and we have worked, and will continue to work, within our powers to resolve the matter between these two companies."