A significant shake-out of the cable industry is in prospect, following the sale of Cablelink to NTL for £535 million (€679 million). NTL will now control a key share of the cable market and plans to be a major competitor in the telephony market. A number of smaller cable operators are seen as takeover targets, while Princes Holdings, the second largest cable and MMDS company, may consider a stock market flotation to raise capital for expansion.

The Cablelink sale price, far more than analysts originally predicted, boosts the coffers of Telecom Eireann and RTE. It is understood the State-owned broadcaster has earmarked the money for its own digital television project. The soon-to-be floated telecoms provider will add its £401 million share to the cash reserves it is building for future acquisitions.

Meanwhile, Esat Telecom indicated that it would remain a competitor in the market here. In a statement after the High Court and Supreme Court decided to reject its request to continue a temporary injunction against the sale of Cablelink yesterday, Esat Telecom said it was "disappointed" by the outcome. But the company's chairman, Mr Denis O'Brien, who earlier in the week said Esat's failure to buy Cablelink represented a significant blow for its plans, insisted the company's fibre optic network guaranteed it a bright future.

"Last year we spent £70 million and this year we will invest a further £95 million in developing our telecoms business," he said. "There are many options open to Esat Telecom in providing advanced telecommunications services to corporate and residential users."

Investors appeared to share the Esat chairman's confidence - shares in the company fell only slightly on the Nasdaq exchange.

Attention will now focus on the future of the other cable operators here, including Princes Holdings, Cable Management Ireland (CMI) and Noir Suir Relays.

Princes Holdings, owned jointly by Independent Newspapers and US cable giant TCI, has 160,000 customers, mostly in Cork and Limerick. CMI, based in Malahide, Dublin, has around 65,000 subscribers in Dublin and some population growth areas such as north Kildare and Mullingar, while Noir Suir Relays serves parts of the south-east.

Princes Holdings said recently that, while it would feel obliged to consider any acquisition offer, it was committed to its own technological upgrade and expansion strategy. TCI, which controlled 75 per cent of the bid for Cablelink, has shown it is ready to invest considerable sums, raising the possibility that it might make an offer for CMI.

An option for TCI and Princes Holdings could be to float the company on the stock market. The Cablelink valuation would suggest that Princes might be valued at £200 million, allowing its owners to raise funds for acquisition and investment by only selling a portion of the equity. If, as expected, it is awarded a so-called wireless local loop licence, this would allow Princes to pursue an aggressive strategy in areas of the telephony and data transmission market.

Both CMI and Princes Holdings would also be attractive to NTL. Although the company has already spent £535 million on Cablelink and promised to invest at least another £200 million upgrading the cable company's network, further acquisitions would extend its customer base and make the introduction of new services more viable.

Even buying CMI would significantly add to NTL's network as the smaller company holds key cable franchises in areas in the Dublin suburbs and further afield in Leinster.