Esat has announced that it is to cut 200 of its 1,300 staff as part of business restructuring that will result in a merger of Esat Business and Esat Fusion.
The new entity, which will be named the Esat Group, is expected to be in place by the beginning of its new financial year on April 1st.
Blaming the restructuring on a failure by the Government to deregulate the industry, Mr Richard Cook, Chief Executive of Esat said the current telecommunications climate was stifling competition.
"We have grown the business very quickly, having doubled turnover in the past two years," Mr Cook said
"We have had significant success with both Esat Business and Esat Fusion, becoming the leading provider of broadband data and corporate Internet solutions in Ireland as well as the leading alternative home phone and Internet company in the country.
"The current Irish market conditions dictate a fundamental restructuring of the company.
"It is also no secret that the slow speed of deregulation continues to stifle competition."
Esat Group offers fixed line communications services and solutions to the business and consumer markets, both of which will be affected by the cuts.
It currently accounts for 20 per cent of the business telephony and data market along with 15 per cent of the residential phone market and over 40 per cent of the internet access market in Ireland.
The reductions in staff will be spread throughout the business and residential arms of the company.
The group is a wholly owned subsidiary of BT employing 1,300 people.