The State's third mobile operator is on a new drive to attract customers and it will need to if the regulator's figures are anything to go by - just 4 per cent market share, writes Jamie Smyth, Technology Reporter

Mr Stewart Sherriff rode into Dublin last October with a clear mission: to turn around the fortunes of the State's ailing third mobile phone operator, Meteor.

Since then the Scottish-born chief executive of Meteor has kept an extremely low profile and refused to do interviews. But seven months later on the eve of a new advertising campaign by Meteor, Mr Sherriff is at last ready to shoot from the hip and lay out the firm's new strategy.

"We are targeting areas of the market which are best suited to our current product portfolio and are developing new products which will attract different types of customers," says Mr Sherriff, who built up an intimate knowledge of the Irish market while preparing Meteor's bid for the Irish licence in the late 1990s.

The firm wants to come in under the radar of the two big players and achieve its objectives of gaining double digit market share, he says in a distinctive accent that betrays his roots in the town of Dunfermline.

Certainly Meteor has so far managed to achieve this. But unfortunately for those who want to see competition in the market it has also come in under the radar of most consumers.

Despite investing more than $200 million over two years Meteor has failed to attract sufficient numbers of subscribers to break Vodafone and O2's duopoly in the market. Figures supplied by the Commission for Communications Regulation (ComReg) show the firm had attracted just 4 per cent market share by December 31st, 2002, two years after its launch in February 2001.

So how is the new strategy going? And importantly, is Meteor's subscriber base growing?

"I'm happy with the results since I arrived at the firm and we are coming off a very strong first quarter," says Mr Sherriff.

But Meteor has decided to implement a new policy on the wishes of its 80 per cent majority shareholder, the US mobile firm Western Wireless, and now refuses to give out detailed subscriber numbers. "We don't want to tell our rivals how well we are doing... There is an element of stealth applied to the whole thing," says Mr Sherriff.

Perhaps. But in the fast growing mobile market, silence tends to breed suspicion. And rivals are sure to seize on Meteor's silence as evidence that it is simply covering up bad news.

Mr Sherriff insists he is confident about the firm's future strategy of targeting different segments of the market who the big mobile firm are not serving well.

Meteor is on a new drive to sign up business customers to its network, which Mr Sherriff claims offers customers less capacity constraints than competitor's networks, Vodafone and O2.

"The difference between Meteor's network and the others is that ours in like driving on the M50 motorway at five in the morning whereas the others are like driving at five in the afternoon during the rush hour."

"The problems which the other firm's face in offering customers network quality and capacity where evidenced by the five-hour system collapse which Vodafone suffered a few weeks ago," adds Mr Sherriff.

Meteor's under-used network doesn't suffer capacity issues, and in theory at least, should provide customers with a better quality service. It is also up to 35 per cent cheaper on average than competitors, says Mr Sherriff, who believes consumers don't yet appreciate the cost advantage Meteor offers over competitors.

Meteor will shortly switch on a network technology known as GPRS (general packet radio service) which it believes will increase its attractiveness to business users. This technology will enable Meteor to offer a suite of new services that require large amounts of bandwidth to run.

"These won't be the type of services that simply sends pictures to other mobiles. We don't think customers are into that," says Mr Sherriff, in a reference to the massive campaigns that Vodafone and O2 launched for their new multimedia message services.

Rather, we want to offer services that enhance people's daily lives, he says. Meteor is currently trialling a walkie talkie type application for mobile phones that is currently in use in the US. It is also trialling a video service that works on GPRS networks rather than the third generation (3G) technology which is being built by O2 and Vodafone at huge cost.

Mr Sherriff says he has no regrets about Meteor's decision not to purchase a third generation mobile licence, which would have enabled the firm to increase the amount of bandwidth it can use to offer video-based services.

"No one is getting a return out of GPRS now," says Mr Sherriff, who sees Vodafone and O2's decision to proceed into the next evolution of mobile technology (3G) as an opportunity for Meteor.

"Vodafone said they would spend €1 billion on rolling out 3G networks. It will be their existing customers who will pay for this. This will help us compete."

But despite all the talk about new sophisticated services, Mr Sherriff says that Meteor's bread and butter customers are consumers using pre-pay mobiles. These customers will continue to be looked after, he says. And the firm is aggressively targeting new users by offering a free SIM card to switch from rival networks. This gives users a cost effective method of trying Meteor by keeping existing handsets.

The start of mobile number portability in July - a system that enables users to bring their numbers with them when they change networks - should make Meteor more attractive to users. It has also introduced innovative tariffs which enable customers to make calls free from 10 p.m. to 7 a.m., says Mr Sherriff.

Yet behind all the positive rhetoric the company's very low subscriber numbers mean doubts about Meteor's future viability remain. So ComReg's update on mobile subscriber numbers in June will be crucial for the firm.

Mr Sherriff, who combines the the role of Meteor chief executive and senior vice-president of Western Wireless International, a division of Meteor's majority shareholder Western Wireless, is well aware that Meteor is still dogged by perceptions that its network coverage remains poor.

"We now have 85 per cent population coverage and the only county we do not serve is Donegal," says Mr Sherriff. "We have exactly the same coverage as Vodafone and O2 in Dublin, Leinster. Kildare and Louth."

Meteor has asked the regulator to force its rivals, O2 and Vodafone, to offer it roaming on their networks in Donegal. In return, Meteor would offer both firms excess capacity in Dublin to overcome quality issues. But few observers believe a deal is likely.

If Vodafone and O2 fail to offer it a deal on national roaming, Meteor may sign a "virtual operator" deal with another telecoms firm or leading brand which wanted to offer a mobile service.

This would enable Meteor to sell off capacity in bulk to a third party in a similar manner to the deal which British operator One-to-One struck with Virgin Mobile. No decision has been made on the strategy but the firm has held talks, says Mr Sherriff.

As vice-president of Western Wireless International, Mr Sherriff knows the global mobile market well. He has spent time working in several exotic locations including Ivory Coast, Croatia and Iceland with Western Wireless International.

Planning problems and a challenge by Orange to the initial licence award made by the regulator delayed Meteor's entry to the market by more than a year, at a time when the mobile penetration rate leapt from 25 per cent to 63 per cent. Most of these problems have now been overcome, says Mr Sherriff, who insists the Republic remains a good place for Western Wireless to invest.

But with the imminent entry of the Hong-Kong-based conglomerate Hutchison Whampoa into the Irish market time is running out for Meteor to add customers.

Mr Sherriff rejects suggestions that the firm is a take-over target for Hutchison and says he has yet to meet anyone from the firm. He says Western Wireless has no plans to off-load its stake in Meteor despite serious financial pressures back in the US market.

And despite rumours that Mr Sherriff would stay just a few months at the helm of Meteor, he says he has no intention of going anywhere before the job is done.