The Irish government has received only three bids for its four UMTS licences following the withdrawal of Orange. The French group cited concerns about the cost of rolling out a 3G network in Ireland and the strict terms of the UMTS concessions as its key reasons for not bidding for a licence. Orange is now thought to be considering entering the market as a 3G mobile virtual network operator in partnership with one of licence winners.

Prior to the bid deadline the UK mobile group mmO2 had also been rumoured to be considering not taking part in the contest but this proved to be unfounded as the company placed bids for both A and B licences. Vodafone Ireland also bid for both types of licence, while Hutchison Whampoa applied only for the A licence.

The terms of the A and B licences differ in that the A concession offers additional spectrum on which to carry MVNO services but requires the holder to reach 80% population coverage by 2008. In contrast the three B licences stipulate population coverage of just 53% - based on rollout in Ireland’s five major cities - by 2008.

Having witnessed the problems created by inflated UMTS licence prices coupled with unrealistic payment terms in other European markets, the Irish government has set spectrum access fees at €27 million and €74 million respectively for the A and B concessions. In addition it has opted for a 20-year licence term instead of 15 years and, perhaps more importantly, after initial downpayments of €12.7 million (A) and €44.4 million (B) are made the licence winners will be able to defer further payments for up to five years to enable them to get their services up and running. The fact that these seemingly favourable terms were still not enough to entice Orange to join the fray perhaps reflects just how dramatically attitudes towards 3G have changed since the heady days of early 2000.