COMPETITION in the mobile-phone sector will move up a notch this week as 3, owned by Hong Kong-based Hutchison Whampoa, undercuts Vodafone and O2 by offering 3G handsets for as little as €9.

The company will begin offering the Sony Ericsson K608i and the NEC 338 for €9 to those customers on its €60-a-month tariff who buy direct from its website or by telephone. In the case of the Sony Ericsson handset, 3 will undercut Vodafone by up to €40.

Graeme Slattery, the head of communications at 3, said the firm was committed to bringing value to the market. “To be able to get a top-end phone for €9 is huge and will go a long way towards people recognising that we’re in the market,” he said. “We’re here to stay.”

Rivals, however, say 3 has struggled since its July 26 launch and industry sources say it has signed up less than 2,000 subscribers. This is denied by 3, although it declined to reveal subscriber information.

The company’s entry into Ireland has seen Vodafone and O2, who between them control 90% of the market, shake up their customer offerings.

3’s phones are also available through 34 Carphone Warehouse stores and about 18 3G shops. In addition to being able to use the handsets for voice calls and text messages, 3’s subscribers also receive free video content from a range of sports events and news bulletins, including goals and highlights from the English Premiership and the UEFA Champions League.

The group has spent €200m on its network and has focused on general consumer packages offering three tariffs at set prices. It has yet to launch either pre-paid or corporate products and has no company-owned retail presence. “It’s something that we’re looking at, but we’re still a new business and we don’t want to get ahead of ourselves,” said Slattery.

Separately, Vodafone, which has about 400,000 Irish shareholders, is in talks to buy out fellow shareholders in Polkomtel, one of Poland’s largest mobile-phone companies, amid continuing uncertainty about the stance of the country’s new political leadership on foreign takeovers of Polish businesses. Vodafone, which owns a little less than 20% of Polkomtel, has retained Goldman Sachs to advise on its talks with TDC, a Danish telecoms company at the centre of bid speculation.

The UK-based mobile-phone company is also in talks with the other three shareholders, Polish companies in the oil, metal and power sectors, as it seeks to gain a majority stake in Polkomtel. Analysts value the firm at between €2billion and €3 billion.

Vodafone, which declined to comment on the progress of its talks, has made a series of acquisitions in eastern Europe this year as the mobile-phone industry there sees expansion outpace other regions.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts