Smart Telecom has withdrawn from the race to buy the country's third mobile phone company Meteor, leaving the way clear for Eircom to re-enter the mobile phone market here.
The move follows businessman Denis O'Brien's withdrawal earlier this month.
Meteor is owned by the Seattle-based Western Wireless, which put it up for sale as part of a reorganisation of its business earlier this year.
Bidders had until the beginning of this month to make a play for the company, which commands around 10% of the mobile phone business in Ireland.
Following due diligence carried out with Virgin Mobile, Smart had put in place a financial package comprising banking, private investor and proposed strategic partner funds to pursue the acquisition of Meteor. But today Smart Telecom and Virgin Mobile said they had concluded that a transaction was not in the best interests of their respective companies and shareholders.
Last week Smart revised upwards its bid for Meteor to above the €400m mark. At that time Smart was still very much in the market to buy Meteor.
This leaves Eircom as the only remaining bidder for Meteor. It is believed that Eircom would have to engage in a rights issue to raise sufficient finance to fund the acquisition. Eircom had previously been a player in the mobile phone market, but sold its mobile subsidiary Eircell in 2001 to Vodafone.
Smart Telecom's bid was believed to have been backed by Martin Naughton of Glen Dimplex, Lochlann Quinn, a former chairman of AIB, and Brendan Murtagh, a director of Kingspan.
'Smart will now, in association with Virgin Mobile and its co-investors, consider other commercial opportunities for profitable development in the Irish market,' a statement from the company said.
In other news, it emerged today that Eircom and Hutchison Whampoa recently signed a deal in which Hutchison will place antennae on Eircom masts across the country.
Hutchison's 3 company is set to roll out 3G services in Ireland over the coming months.
* Eircom shares closed two cent lower at €1.83 in Dublin this evening.
