THE EU Commission decision on the telecommunications sector means competition is set to intensify, particularly for the business market. The decision received a broad, if qualified, welcome from both Telecom and its competitors in the business sector such as Esat, Cable & Wireless and TCL Telecom.

What the decision - initially recommended to the Commission by Commissioner Mr Karl Van Miert's Competition Directorate - means is that Telecom will retain its monopoly of basic domestic telephone calls until the year 2000, two years later than most of Europe. But there will be a price, in particular the announcement that so called "alternative infrastructures" - the networks of big companies like the ESB - can be used to compete with Telecom in providing services to business.

Also, the Commission may yet put pressure on Telecom to sell its stake in Dublin cable TV company Cablelink, which would provide another avenue to competition.

The fight for the mobile phone market will also begin in earnest when Esat Digifone comes on stream, next year, while technology is also opening new routes to competition. Despite the derogation on the domestic market, Telecom is facing an era of fast growing competition.

Not surprisingly, Telecom is putting the best face on it, saying the Commission's decisions are good for it and for the customer. It says it aims to continue its strategy of reducing prices and costs.

By next January Telecom should have a powerful ally in KPN/Telia, the Dutch Swedish consortium which is paying £183 million for a 20 per cent stake with up to a further £200 million later if it exercises an option to purchase another 15 per cent of the group.

The consortium will provide vital expertise to help Telecom combat competition.

Telecom must also reduce phone bills by 6 per cent a year over the next five years, as ordered by Mr Lowry under a new regulatory regime for the sector.

But Telecom's competitors will also be intensifying their efforts. The Commission's decision goes some way to clarifying what the market conditions they will face.

Understandably, Esat is annoyed, saying it would like the opportunity to compete for the domestic market.

Esat chief executive, Mr Mark Roden says the claim by Telecom and the Government that the State company needed time to rebalance charges - lowering international or commercial tariffs while increasing long distance rates - just doesn't wash.

"Only national phone companies talk about it - they increase prices where there is no competition and drop prices where there is competition," he says.

However, all Telecom's competitors have welcomed the opening of alternative infrastructures as a new avenue to competition.

The next step is for the Government to get its strategic alliance proposal passed by the Commission.

The deal was only submitted for approval on November 14th, although it was announced many months ago.

The Commission has one month to decide whether the strategic alliance warrants further investigation. Telecom's competitors are expected to make submissions on the matter. It is expected the Commission will pass it and that competitors will seek full transparency of all Telecom's various operations in its annual accounts.