Ocean chief executive Mr George McGrath is to step down from his post after 18 months in the job. He will become executive deputy chairman with responsibility for issues such as regulatory affairs for Ocean, which is a joint venture between the ESB and British Telecom.

Mr McGrath, who will remain in his current role until a successor is appointed, probably in the New Year, will also be responsible for external relations and "specific new business initiatives".

Mr McGrath, a former commercial director and deputy chief executive of British Telecom in Northern Ireland said last night that he would occupy the new role for at least a year. He acknowledged that 18 months as chief executive was not a very long period.

However, he said that when he took the job he agreed to stay for 18 months. He said he had already been part of the project team (which put together the joint venture) for two and a half years.

"I am not walking away, I am just changing roles," he said.

Mr McGrath said the company was still on track to make an operating profit by year four. He said the company had a turnover of £7.5 million in its first year of operation. Mr McGrath added that the company business plan was still on target and said that its free internet access offer had been highly successful. The move forced several other operators to follow suit.

Mr McGrath said the company had not published customer figures, but he maintained that "everything is on track." He said it was better to "under-promise and over-deliver".

Industry sources said that Ocean "is making a lot of noise in the market". One source said it had about 20 large corporate clients. The company is concentrating on this sector of the market.

Meanwhile, Ocean is currently taking a High Court action against Eircom in a dispute over the supply of bandwidth capacity from the former State telephone company.