While Eircell and Meridian Communications subsidiary Cellular issued statements stating they were "delighted" with yesterday's judgment in the High Court, the final outcome of the case is not yet known. Further hearings under competition law will proceed on May 2nd.
Cellular had alleged that Eircell abused its dominant market position in its conduct of a contract between both parties. Eircell rejected this.
Cellular took its case after Eircell indicated early last year that it would not be renewing the discount scheme when it lapsed at the end of 1999. Cellular also alleged that Eircell interfered with the development of its business by delaying its billing procedures.
For its part, Eircell disputed Cellular's right to pass the discounts on to its own customers. It also said Cellular's hearing should be dismissed, alleging that the company had no licence to provide a service for which a licence was required.
At the High Court yesterday, Mr Justice O'Higgins said Cellular did not need such a licence under EU regulations. The company enabled or facilitated radio communications for its clients, but its service did not amount to the provision of such communications.
While this element of the judgment "delighted" Cellular, its statement did not refer to Mr Justice O'Higgins's ruling that Eircell had no contractual obligation to renew its volume discount agreement with the company.
On the face of it, the judgment indicates that Eircell may be in a position to withdraw its discounts. But the company will continue to provide discounted airtime to Cellular while the Competition element of the case is being heard.
Cellular said last Monday that it would invest £10 million this year developing its Imagine mobile phone service. The company does not own a network itself, so it buys airtime from Eircell and sells it on at a partial discount. The discount it receives from Eircell is crucial because it enables Cellular to undercut its competitors. The company previously provided a similar service to business customers.
The current agreement was due to lapse at the end of 1999, but continued because Cellular's court case was unresolved.
The judge said yesterday that Cellular had no right to renew the contract because certain elements of the contract such as price and duration had not yet been made. These were so essential to the contract that that their absence indicated no agreement had been made.
