WHAT is an Irish based Internet service provider worth? In the case of MediaNet and Club InterNet about £2 million.
That's the total valuation placed on them by radio station FM 104 - it says it has taken a 33.3 per cent stake in them for £660,000.
This is only the latest major ownership change in the rapidly growing sector - in fact most of Ireland's top Internet service providers (ISPs) have changed hands in recent weeks.
Ireland's largest ISP, Ireland OnLine, has declined to comment on buy out rumours. Indigo, the second largest provider was recently sold by the Moyna family. And Telecom Eireann is expected to start selling Internet services directly to home users from next month.
MediaNet and Club InterNet were formed just over a year ago by a group of private investors including managing director Tom Kelly and AFA Advertising, who will continue to hold equity. While Club InterNet says it has 2,000 domestic accounts - making it about the third largest ISP - the bulk of the group's £1 million annual turnover is generated from MediaNet's corporate accounts. These include Independent Newspapers, UlsterBank, Irish Life and Iarnrod Eireann.
"The growth is really in the corporate market rather than home users," spokesman Stuart Fogarty said on Friday night. FM 104 has an option to take a further stake in the two Internet firms,
The media convergence between an Internet service and a radio station should make for an interesting marriage. While FM 104 now tops listenership surveys in Dublin, broadcasting regulations prevent it from expanding further in Ireland's radio sector - hence the diversification into cyberspace.
Another ISP which recently changed hands is Indigo. Last week it reminded customers that the introductory offer since its launch of £25 per year (plus VAT) runs out at the end of December. From next January home users will be charged £100 plus VAT. New subscribers will also be charged a £25 first time connection fee.
Within its first full year, Indigo has rapidly grown to 14,000 subscribers and obviously it wants a number of these to migrate to its rivals after their initial accounts run out on New Year's Eve.
Another unpredictable factor in the sector is the arrival of Telecom Eireann. Industry sources expect it to launch its new division offering Internet access to home users within the next three weeks. It is unlikely to undercut existing providers' prices and will probably charge around £12 per month.
By comparison, HomeNet, which merged with EUnet last May, charges a £25 connection fee, gives free access for one month, then charges £12.50 a month thereafter (all including VAT). And Ireland OnLine (IOL) charges £10 per month plus VAT. Together with its strategic partner PostGEM, An Post's networking subsidiary, IOL has built up its local access points so that by the end of December subscribers in any county will be able to access the Net at local phone rates.
Meanwhile there has been growing speculation within the industry that PostGEM has bought a significant share of IOL, which now has about 20,000 subscribers. But IOL's Colm Grealy gave a firm "no comment" statement on Friday about the deal.
When asked about the current fluctuations in the sector, he said: "I think the market is beginning to shape up and people are beginning to realise that there's no quick buck in the Internet. Service providers have to be well resourced to build themselves over the next five years before things get really interesting. There's no big profits to be made just yet."
In the run up to expected record sales of PCs this Christmas, most ISPs are offering a wide range of sign up extras. For example, last week Indigo launched a family pack" and a raffle for a free car, while IOL has expanded the free Web space it gives subscribers to five megabytes.
Meanwhile Club InterNet is also supplying modems with its Internet accounts in an all in deal of £20 per month (plus VAT plus), or 12 months' access and an upgrade to a 28.8k modem for £199 (plus VAT).