Regulation

ComReg, the Irish communications regulator, recently completed a market review of the level of competitiveness in the Irish mobile phone market. ComReg found that the market is not effectively competitive with ourselves and another operator exercising a position of joint dominance.

We have appealed against this decision on the grounds that misleading conclusions were drawn. We believe ComReg's analysis used incorrect legal tests, did not take competitive trends into account and failed to recognise new and significant developments in the Irish market.

Since the finding, a third operator has increased its market share to around nine per cent and we understand that another mobile company plans to launch in Ireland soon. In the future we believe that the competitive dynamics of the Irish market will continue to change significantly and should subsequently change the regulatory environment of our industry.

We will continue to invest in the long term to retain and grow our presence in the Irish market. This strategic approach allows us to continue to provide innovative services and the best possible experience for our customers. Our reputation in the marketplace helps us to retain and recruit an ambitious and passionate workforce which in turn enables us to meet the challenges of an evolving and dynamic Irish mobile market.

In June 2004, due to a billing system issue, a number of O2 Ireland contract customers were billed twice for voice calls they received while travelling abroad in some countries in Europe. Approximately 70,000 customers were impacted during the period from the end of March to the middle of June 2004. Affected customers were contacted immediately, reimbursed as appropriate and O2 Ireland also, on its own initiative, paid impacted customers a 50 per cent inconvenience credit. The company subsequently commissioned detailed external reviews of the system and key recommendations have now been put in place both in terms of technology process improvements and improvements to our tariff change process.