British Telecom's purchase of Esat - now expected to be successfully concluded - heralds a period of turmoil for domestic and business users in the Republic, but one in which competition should intensify, services improve, and prices fall.

At yesterday's press conference, BT made it clear that its immediate objective was to erode Eircom's lead in the fixed-line, Internet and mobile markets. The company, barring any legal challenges, already controls a majority of Esat Digifone, and is likely to attempt a merger of Esat with Ocean, its joint venture with the ESB.

The key area to watch is mobile. BT owns Cellnet in Britain, and while it wants to keep this separate from Esat Digifone, it is likely to integrate the two services to some extent. For the moment, Esat Digifone and Cellnet seem set to continue gouging their customers for "roaming" charges in each other's area, but this could change. If, for example, the third mobile licence were awarded to Orange, or if Vodafone bought Eircom and Eircell, roaming charges - the charges levied on mobile users when they are outside their own market - might be abolished.

Both Esat and Ocean have made a small amount of progress to date in attracting fixed-line domestic customers, and have had greater success with business users. In documents it released this week, Esat said it now had almost 13,000 corporate customers, including blue chip companies such as Intel, Dell, Microsoft, Gateway, Reuters and Guinness.

Ocean has around 10,000 customers, but has declined in the past to give a breakdown of this number between business and residential users. Industry analysts have suggested it has around 20 large corporate clients. Ocean also pioneered no-fee Internet access for domestic users.

But two developments in the months ahead are set to change the rules of the fixed-line game forever. Firstly, cable companies, such as NTL and Irish Multi-channel, will offer their customers telephony as part of a television and Internet package. Secondly, the telecommunications regulator, Ms Etain Doyle, will "unbundle the local loop".

In Britain, the arrival of NTL had an immediate impact on BT. The newcomer not only matched BT's basic price for the rental of a telephone line, but threw in a cable television and Internet product as well.

With 350,000 subscribers, mainly in the Dublin area, NTL has the potential to make serious inroads into Eircom's - or anyone else's - residential customer base. Other cable companies throughout the State could wreak similar havoc.

A third development that will have a significant impact is a technology called Asynchronous Digital Subscriber Line (ADSL). In brief, this allows anyone with access to the local exchange transform the ordinary copper wire leading to each individual home into a super-fast phone and Internet line.

With Eircom itself on the block, its future success or otherwise is difficult to predict.

smaccarthaigh@irish-times.ie