The two operators, which between them account for over 80% of the Irish mobile market, have both submitted expressions of interest to the Department of Finance following its request for tenders to supply "mobile voice and data communications" to government departments.

According to the tender document there are over 40,000 mobile phones and other mobile devices in use by Irish civil servants. The contract to supply mobile services to those 40,000 users is currently held by Vodafone.

The Department Of Finance is keen to break up the business between several operators, however, in line with government policy to promote competition for state contracts.

The tender states that the government is looking for "not more than four providers" to set up a virtual private network (VPN), a secure network to handle mobile voice and data such as email, to cover all state employees. Use of the VPN will also extend to partners or agents of public bodies, such as doctors, dentists and doctors, which carry out work for government departments or public bodies but are not directly employed by them.

The document also states that the operators will have to supply services such as voice over internet protocol (VOIP), which could potentially lead to siginificant reductions in public sector mobile bills.

Both Vodafone and O2, the number two player in the Irish market, have submitted expressions of interest in the contract. Eircom-owned mobile operator Meteor is also expected to apply but a spokesperson for the company could not confirm whether or not it had yet submitted an expression of interest. Recent market entrant 3 Ireland, however, said it will not be tendering for the contract as it wishes to focus on its consumer business.

The tender process will be completed in the new year with the contract scheduled to begin in summer 2007.