Eircom is to close Rondomondo, its digital publishing arm which employs 35 people. It is the latest move by the telecoms group to restructure its multimedia operations - a move prompted partly by retrenchment in the telecoms sector.

Rondomondo will be the fourth tech company in which Eircom had a shareholding to have been put into liquidation, receivership or wound down. Ebeon, in which Eircom had a 51 per cent shareholding, was the most high-profile of these companies. It closed last month with the loss of 170 jobs. Earlier this week, Nua, in which Eircom had a 20 per cent stake, went into receivership. Some 35 people at Nua, headed by Mr Gerry McGovern, had not been paid for a month. Viasec, a company based in Donegal, in which Eircom had a 20 per cent stake, was put into liquidation earlier this month.

It is understood a final decision on Rondomondo's fate will be made next week and that Eircom will absorb Rondomondo into its existing operations. The company, billed as a digital publishing house, was launched with great fanfare in July 1999. There has been increasing speculation about its role since its launch. In recent weeks, the focus has turned to its future. Rondomondo is based in Eastpoint Business Park in Dublin where it has an art production studio as well as two mixing rooms. It was part of the Fuse FM consortium which submitted a bid to the Irish Radio and Television Commission for a Dublin radio licence.

The company said that although much of its content was available on the Internet, it was also involved in "several leading edge projects, bringing content to mobile phones, interactive television and new digital media devices".

The company runs the websites Doras, Muse and Cumasc. It was also involved in publishing online magazines. Last October, Rondomondo announced it was establishing four business areas within its organisation. One of these was Title Publishing, which it said would also be responsible "for the roll-out of two new sites in the coming months, including a comprehensive movies magazine and a Dublin events listings service". A spokesman for Mr O'Neill, the company's chief executive, and Rondomondo declined to comment last night. Eircom also declined to comment.

Ironically, when Rondomondo was launched, Eircom chief executive Mr Alfie Kane said he was unsure about the name.