Business Technology

Friday 22 August 2014

Adrian Weckler: Is Setanta Sports really planning to enter the mobile phone market?

Adrian Weckler, Technology Editor

Published 07/07/2014 | 13:19

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Is Setanta really thinking of launching a mobile operator here? Or is it pursuing a buzz industry project for the optics?

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Today, the television company confirmed that it is currently in “commercial discussions” over a planned new mobile outfit. A spokesman for the firm declined to name the network it is “discussing” plans with, but it is speculated that 3 Ireland could be the network in question.

But is this really happening? Lots of companies in Ireland ‘plan’ possible virtual operations but it it is a big step from there to actually launching one. Most never follow through. I remember looking at branding literature for a new mobile operation to be set up by Wimax operator Imagine. But it never happened.

So although Setanta may be in “commercial discussions” about setting up a mobile operator, there is no guarantee it will see the light of day.

However, if Setanta does actually proceed with an operator -- and that is a big ‘if’ -- it faces a much steeper hill to climb than rival entrants such as UPC or Carphone Warehouse.

First, it may not get the same access to fixed network capacity that UPC and the Carphone Warehouse appear to have negotiated.

This is a big deal: neither UPC nor the Carphone Warehouse would have jumped at the opportunity to launch in Ireland without this apsect of the deal. It allows both operators to focus on features such as unlimited data allowances without having to pay a cent more to 3 Ireland (whose network will bear the brunt of the data usage).

Second, Setanta is at a massive disadvantage to all of its potential ‘virtual’ rivals when it comes to actually selling the service. UPC will offer its mobile package as part of TV and broadband bundles. Carphone Warehouse has 91 physical shops around the country to sell its new operator service. Tesco Mobile has a massive brand, an active clubcard loyalty campaign and lots of physical stores. Even Postfon, which many have forgotten about, has post offices. So how would Setanta actually sell the service? Through ads on its (limited) sports television feeds?

Then there is the falling revenue of the Irish mobile market itself. Operator monthly revenues are at historic lows here, having fallen to €16 per month for prepaid services and €26 per month on average for all bills.

This leaves a best-case scenario for any supposed Setanta bid looking at a profit ceiling of a few hundred thousand euro for the forseeable future.

Is Setanta seriously planning a new operator?

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