40,000 customers of iD Mobile, the mobile phone network owned by Dixons Carphone in Ireland, will have to move providers after the business was placed into provisional liquidation.
The business has been up for sale for over a year, but no buyer could be found and so its owner has decided to close it down.
iD Mobile was set up in 2015 after Three Ireland took over O2 Ireland.
In order to maintain competition in the marketplace, Three was ordered by the European Commission to provide mobile spectrum to two new “virtual operators” – mobile companies that use the networks of others to provide a service.
Earlier, in the High Court, Ms Justice Caroline Costello appointed Tom Murray of Friel Stafford as provisional liquidator after she was satisfied the company was insolvent and unable to pay it debts.
The court heard that iD Mobile had accumulated a deficit of €25.2m after three years of trading.
Ms Justice Costello said the orderly winding up of the company was in the interests of the customers and she noted the parent company was prepared to fund the liquidation.
Dixons Carphone invested some €20m in setting up iD Mobile.
It targeted 5-6% per cent of the market, or around 250,000 subscribers, but struggled to make that target.
In a statement, Dixons Carphone said it had invested substantial resources to try to grow and support the business, but it said that it had been unable to reach the scale it needed to against established operators and its losses became unsustainable.
Existing customers of the provider will be contacted by text, letter and email in the coming days and will be offered full service for the next 30 days.
According to Dixons Carphone, bill-pay customers will not receive any further bills for their iD Mobile service and pay-as-you-go customers will be able to use any remaining call credit over this period.
Customers will be able to move to another networks free of charge whenever they wish.
“Helping our customers to seamlessly transfer over to an alternative network with minimum of disruption is our key priority,” said Mark Delaney, Managing Director of Dixons Carphone Ireland.
Dixons Carphone says iD Mobile’s suppliers will also be paid for the services they provide during the period of the liquidation.
The liquidation only relates to Ireland and iD Mobile in the UK will continue to trade as normal.
17 people are employed full-time at iD Mobile.
Dixons Carphone says it is talking to them about their futures and some will be transferred within Carphone Warehouse where possible and where appropriate roles exist.
The company says that, if a transfer is not possible, alternative options will be considered, including outsourcing to another company or redundancy.
As consultation has only begun, Dixons Carphone says it is not yet clear how many of the 17 staff will lose their jobs.