Cellular 3, the telecoms company which owns the Imagine mobile phone brand, is raising some £20 million in private funding and is planning to become a pan-European mobile virtual network operator.
The round of funding is being negotiated by majority shareholder and chief executive at Cellular 3, Mr Sean Bolger. It follows a substantial investment made by a strategic partner, which is likely to be announced by the company next week.
Speaking to The Irish Times yesterday, Mr Bolger would not disclose the identity of the strategic investor, but he said the £20 million (€25.5 million) funding would value the company at £80 million-£100 million.
"We want to consolidate and expand our growth in the Irish market so that we can compete effectively with the major networks," he said.
The Imagine brand, which was launched in April, is the focus of a £3 million advertising campaign and currently has more than 20,000 Irish mobile customers.
Mr Bolger said a recent decision by telecoms regulator, Ms Etain Doyle, on enabling access to mobile networks, would allow the Imagine brand to compete "with its gloves off for the first time".
The company is currently involved in a protracted legal battle with Eircell, which is seeking to cancel the commercial contract through which it sells Cellular 3 mobile airtime. The case is due in court again next month.
Last month the regulator said she would intervene in commercial negotiations between firms who want to become mobile virtual network operators and the major network operators such as Eircell and Esat Digifone. However, she said the regulator's office would not intervene for companies that merely sold airtime.
The definitions of airtime reseller and mobile virtual network operator are extremely complex, but the regulator has ruled that virtual network operators must purchase network elements that allow a virtual operator to provide connection, rental and call services directly to the customer.
Mr Bolger insists Cellular 3 is 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.
Independent customer service, separate billing functions and the imminent launch of new mobile convergence product, MO, was proof of its position as the first Irish virtual operator, he said.
Cellular 3 is also exploring opportunities with third generation technology, after being approached by several other telecommunications companies, he added.
The company is currently recruiting additional sales, marketing and customer service staff in an effort to grow the Imagine brand. It expects to employ some 200 staff by next June, up from a current level of 140.
Meanwhile, Mr Bolger, who owns a 10 per cent stake in European telecoms operator, Kast Telecom, revealed that he was in discussion with several European telcos about launching the Imagine mobile phone brand in Europe.
He said the pan-European Imagine brand would work well in several countries such as France, Germany, Belgium and Italy. Cellular 3 would adopt a partnership approach to enter this market and would need to raise additional cash, he added.
The £20 million fundraising will dilute Mr Bolger's and Mr Gerry O'Connell's investment in Meridian Communications, the holding company of Cellular 3 to about 50 per cent. They currently hold over 60 per cent.
