Senior figures in the ESB are reviewing whether to enter the competition for a third-generation (3G) mobile-phone licence. The State-owned company initiated a €50.8 million (£40 million) investment in its networks last year to support a bid, but it is now said to be uncertain about proceeding.
When the company commenced the construction of a new fibre optic network on its national electricity system, it anticipated "hundreds of millions" in revenues if a 3G bid were successful.
With the ESB investing €2.67 billion on its electricity networks, the company is expected to scrutinise the likely return on an investment in 3G.
Given the downturn in the global telecoms market and the high cost of the licences, informed figures believe the company might not turn a profit from its investment for up to 10 years. "It is active and the board has been looking at it," said one person.
3G licences will be awarded after a beauty parade conducted by the telecoms regulator, Ms Etain Doyle. The four 20-year licences will cost €50.8-€114.3 million over 15 years. Applications to Ms Doyle's office are expected by March 27th and the ESB board is expected to make a decision before then.
The company said last year that it required "a lot of support" from a partner in the global telecoms market to support a bid. While "fairly detailed discussions" were under way, no agreement was expected until final details of the competition for 3G licences were published by Ms Doyle.
With market conditions tough and telecom valuations still down on the heights achieved before the Internet bubble burst in March 2000, one informed figure said potential partners to the ESB were "not queuing at the door".
The ESB bid unsuccessfully with Motorola in the mid-1990s for the State's second mobile- phone licence.
Yet the company was still a significant beneficiary of the telecoms boom. In early 2000, it made a €109.2 million profit when its half-share in the Ocean venture was sold to its joint venture partner, British Telecom.
However, the Government's refusal last year to sanction a €1.8 billion bid for a cluster of electricity companies in Poland may also influence thinking at senior levels in the company.
The backbone network can be put to alternative uses and the company said last year that it would be used even if it did not secure a 3G licence.
The company has been awarded a basic telecoms licence by Ms Doyle and it expects to roll-out services to industrial-scale customers by the end of the year.
The company has completed 450 kilometres of its southern broadband loop between Dublin, Waterford, Limerick and Cork. The complete network will run over 1,300 kilometres in a "figure of eight" that links Donegal and Cork. The completion target is the end of March 2003.
