Despite the hype surrounding the Celtic Tiger, Irish consumers use the Internet less than most other Europeans and do not have widespread access to digital television or broadband technologies.

The situation is so bad, influential research group Forrester recently labelled the Republic a "consumer laggard" that could safely be ignored by European e-businesses.

Several recent surveys show between 17-22 per cent of Irish consumers have online access from their homes. This is below the European average and just half that of Sweden, Hong Kong and Singapore.

According to Mr Paul Jackson, technology analyst with Forrester, there is a big gap between the Celtic Tiger's perception as a centre of e-commerce and the reality for its citizens.

"Ireland has more in common with Southern European nations such as Spain and Italy than Northern European nations with high technology adoption," says Mr Jackson.

There is also a significant digital divide, with almost everything concentrated in Dublin while the rest of the Republic is more agriculturally based, he adds.

Perhaps the most worrying aspect to Forrester's analysis is that it was concluded before the full effects of the downturn in sentiment towards the telecoms industry was fully known.

Most analysts agree that providing high-speed telecoms infrastructure and Internet networks at low cost is essential to promote consumer uptake of new technologies.

But the cash crisis in telecoms has spurred a global retrenchment in the sector, which is already impacting on the Republic's ambitions to promote a true information society.

One of the first firms to pull its Irish investment was NTL, the New York-based cable firm that paid £535 million (€680 million) for Cablelink. Last week it radically revised its plans to offer a full complement of broadband services, which would have included home shopping, video on demand and high-speed Internet access.

Instead of building a state-of-the-art network, NTL has decided to use its existing network to offer digital television.

It will not offer full interactive services for digital television or, crucially, the high-speed "always on" Internet service, which would have encouraged Internet use.

This is a major disappointment, given that Dublin has the highest cable television penetration rate in Europe at 83 per cent and it was thought NTL would bring much-needed competition to the Republic's market. Shortly after NTL halted its broadband deployment, several domestic telecoms players abandoned trials with digital subscriber line (DSL) technology.

DSL, which has been available in the US for almost 10 years and is gaining subscribers in Europe, offers consumers a high-speed "always on" Internet connection and various other multimedia services.

Analysts believe a combination of the current cash crunch, weaker competition presented by NTL's revised plans and regulatory problems surrounding access to Eircom's local network persuaded telecoms operators to pull back investment.

Incumbent operator Eircom is reviewing its entire multimedia operations and its decision to withdraw from a Government-funded project to deploy DSL could signal the death of the technology in the Republic.

Ironically, Eircom is in a much better financial and regulatory position to deliver these technologies than its main Irish competitor, Esat, an Irish subsidiary of British Telecom (BT).

BT is saddled with debt of almost $30 billion (€33 billion) and is engaged in major financial cutbacks. Likewise, Eircom's ownership of the local access network, or "local loop", makes it more difficult for Esat to develop a business case for DSL.

According to telecoms consultant Mr Enda Hardiman, chief executive of Hardiman Telecommunications, swift and energetic regulatory action is called for to open up the local loop to competition quickly.

"It is deplorable that consumers in Ireland only have access to dial-up Internet services," he says. "PTTs [incumbent telecoms operators such as Eircom] are dragging their feet all over Europe."

Although a process of opening local networks to competition was mandated by the European Commission by January 1st this year, not a single local loop has been unbundled here.

A dispute over pricing is delaying the process. Eircom is proposing to charge operators €25 (£20) for each loop per month. This is among the highest figure proposed in Europe and has been opposed by other operators.

Without access to the local telecoms network some experts have seized on wireless local loop technology as a means of beaming high-speed Internet services into small businesses and homes.

Six licences to operate these services were issued last year but only one company, Formus Broadband, officially introduced a service. Last month Formus went into liquidation, further restricting the choice for the State's consumers.

Only cable firm Chorus is offering a high-speed "always on" Internet service to its residential customers. However, it is understood that such services are available to a limited number of customers. The telecommunications regulator has also expressed concerns about Chorus's offerings, saying she received 300 complaints from customers last year.

In the absence of high-speed "always on" Internet offerings to lure consumers onto the Internet, a recent study by research group Nielsen concluded high costs of access were prohibiting Internet use.

And despite falling telecoms costs, regular Internet users may be about to feel the pinch. Esat, the only operator in the Republic to offer a "flat-rate" unlimited Internet service is considering withdrawing the product, called IOL No Limits.

Esat recently stopped signing up new customers because it has so far failed to secure a "flat-rate" interconnect charge from Eircom. While Eircom is charging Esat per minute of use, Esat is only charging customers £20 per month. A final decision on the product is expected soon.

With all the negative newsflow coming from domestic telecoms and Internet providers, Forrester's analysis of the Republic as a "consumer laggard" seems accurate and takes some of the gloss off corporate success in the technology sector.

But low consumer uptake of Internet technologies will eventually impact on business too. According to Forrester's Mr Jackson, Irish-only dot.coms won't survive as only 18 per cent of online consumers have ever made an Internet purchase.

On a more fundamental level, early adopters of technology such as the Scandinavians have managed to turn this into business expertise in Internet and mobile technologies, he says.