The Competition Authority has rejected an Eircell proposal that all mobile phone operators be given equal access to every Garda site. Eircell's rival Esat Digifone, currently has an agreement with the Garda to locate equipment on their masts.

The authority said it would be "strongly opposed" to any plan to allow all operators to locate up to four antennae on Garda masts. It said imposing a rule such as this would be likely to impose a disproportionate cost on rivals, because everyone would have to move to a uniform technology.

The Tanaiste and Minister for Enterprise, Trade & Employment, Ms Harney referred the issue of using Garda masts to the authority during the summer. It followed an Eircell request that it should be allowed to locate mobile phone antennae at 260 Garda masts around the country.

The Minister is understood to have been concerned about the implications of giving some operators permission to use sites, while others were refused.

In a lengthy report on the matter, the authority says there is no basis for setting aside the agreement already in place between the Garda and Esat Digifone.

"It is entirely appropriate and welfare enhancing for the Garda to enter into such a commercial arrangement," it says.

The authority notes that the arrangement "allowed for the entry of the second competitor in the market, thereby facilitating some form of competition where there was none before."

It also says that as the Garda sites are not an essential facility, there is no basis in competition law to set aside any terms of the agreement.

The authority said it had no objection to Eircell entering into a commercial arrangement with the Garda for access to their sites, but this should be on the basis of "competitive bid, not by regulatory rule."

However, it also noted that the Digifone/Garda agreement may restrict the Garda's ability to fully exploit the commercial potential of its sites.

"This is the case as to sites which have been upgraded by Esat Digifone to accommodate Esat Digifone and Garda antennae only and which for technical reasons, could only be upgraded to allow for access by other entrants... at great trouble and expense," it says.

Meteor, the third mobile operator is due to enter the market within the next year. The authority warns that the Garda should not enter into any agreement with Eircell which would have the effect of preventing access to Metor on the Garda sites.

Last night Eircell chief executive Mr Stephen Brewer said he was disappointed with the authority's ruling. He said as part of the proposal to link with the Garda, Eircell had offered to build base stations which would help Meteor's entry into market. It would also accommodate the three operators, he said. `We feel we are losing out, but the people who are really losing out are those who will not get the coverage they need from us or from Meteor, as quickly as they might have, especially in rural areas," he said.

Mr Brewer said Eircell had been prepared to invest £8 million in building infrastructure using Garda sites and the issue had been going on for 18 months.