ESAT Digifone caused a stir last year when it beat some of the best telecommunications companies in the world in the bid for Ireland's second phone licence. The principal partners in the consortium are Esat Telecom, a small independent Irish telecommunications company, and Telenor, the main telecom company in Norway.

Esat was formed by Mr Denis O'Brien, the entrepreneur responsible for 98FM and its allied stations in Sweden and the Czech Republic. Although, relatively small, the company, competes aggressively against. Telecom Eireann for fixed line business traffic.

Esat may know how to compete with Telecom but it is Telenor which has experienced, the development of a mature mobile phone market. Almost a quarter of the Norwegian population is connected to the mobile network. Telenor predicts that within the next 30 years the fixed line telephone may become almost obsolete in Norway, with as many as 80 per cent of people having a mobile.

An all out price war is unlikely as call costs here are already among the lowest in Europe.