BT is aiming for number two slot among telecoms

Although reticent to elaborate on specific strategy details the message from British Telecom to its competitors yesterday was clear; it intends to be the number two telecommunications company in Ireland.

BT's formal entry into the Irish marketplace - it has a low key, but established presence already - signals an even bigger shake up on price and services in Ireland.

Using the ESB's existing infrastructure, the new joint venture will merge existing BT's existing business with the new company's. But, more importantly, BT brings to the table its Concert Communications link. This alliance, of which BT is a 75 per cent owner, provides advance telecoms services for business users in Europe and globally. It is linked to MCI in the US, a huge long distance carrier.

BT and the ESB believe that Concert will give them a significant advantage when targeting the multinational companies, who have subsidiaries all over the world. The Concert connection can offer switching capabilities in 800 cities in 50 countries. When further international links with other telecoms companies are added this gives an additional 110 countries.

"It gives us real connectivity," Mr George McGrath, BT's business and development director, said yesterday.

The companies also hone in on companies operating in both the Irish and British markets. The UK accounts for almost 70 per cent of outgoing international minutes from Ireland, according to BT.

For the ESB, which is facing a liberalised market and a consequent fall in revenues, it provides an opportunity to create a new revenue stream. It has already successfully demonstrated its ability to do this, through ESB International.

For BT, it provides a strong foot in the door in a market where prices are set to continue to fall, but demand is expected to increase. Already BT is building its own brand awareness in Ireland through a campaign launched last month, enticing people to buy BT equipment.

Mr McGrath said yesterday he firmly believed the Irish telecoms market still had huge growth potential.

The advantage for the new company will be that it can combine the lean approach of new, more efficient telecoms players, with the muscle of a highly-experienced operator - in both monopoly and liberalised markets - with good global connections.

Despite this, it would be unwise to write off the state operator Telecom, which have thrown down the gauntlet recently on charges and Esat Telecom who have been chipping away at Telecom's market share.