Mobile phone firm Orange is expected not to bid for a third-generation mobile licence here in a competition which may struggle to attract four competitors amid a severe downturn in telecoms.

Vodafone and Digifone are expected to submit bids by the noon deadline today. The third existing operator Meteor said it would make no final decision until today. Third-generation mobile phone licences should enable firms to provide high-speed internet and other innovative multimedia services to a range of mobile devices.

Orange, which was hotly tipped to apply for an Irish licence, is believed to have lost interest in the process following the breakdown of talks between itself and the ESB. Industry sources said the firm may now take a wait-and-see approach in the Irish market. Hutchison Whampoa, the Hong Kong-based telecoms firm which has a third-generation licence in Northern Ireland, may bid for a licence here to enable it to offer an all-island service.

If only three companies bid for the four licences on offer, the State could stand to lose at least €50 million.