Esat Telecom is close to buying EUnet, Ireland's leading Internet service provider, with talks between the two companies said to be at an advanced stage. It is likely the deal will need the clearance of the Competition Authority, which is currently being briefed with the details.
The move follows Telecom Eireann's recent takeover of other Internet service provider, Indigo, and An Post's buyout of Ireland On Line (IOL). The purchase by Esat would ensure that one major Internet company will remain in private ownership.
Telecommunications companies globally are moving to align themselves with Internet service providers as they equip themselves for on-line business opportunities and so Esat's move to get a strong presence in this area is not a mistake.
The cost to Esat is not likely to be significiant in comparison with the overall high level of investment being undertaken by the company in expanding its network and in contributing to the building of the mobile phone network of Esat Digifone, in which it has a 45 per cent stake. Spokespeople for both companies declined to comment yesterday. However, a takeover of EUnet by Esat would fall in neatly with the company's current policy of substantial investment in building its own infrastructure to prepare for the opening of the residential market in 2000. Last week Esat floated part of the group on the Nasdaq exchange in the US, in a move which raised $78 million.
Last night, Esat Telecom's chairman and founder, Mr Denis O'Brien, said he was unable to comment on the deal, having just returned from a finance raising roadshow in the US.
Founded in 1991, EUnet is Ireland's largest and longest established Internet service provider to the corporate market. The company now provides over 60 per cent of business Internet connections in Ireland. Clients include IONA Technologies, KPMG, Silicon Software Systems, Ernst & Young, ESB, Shannon Development and the VHI. Some of EUnet's larger corporate users are doubling their Internet traffic every six months.
The company has always concentrated on the provision of business Internet solutions rather than individual consumer services, and has been first in the market with a range of new services for corporate clients over the last year. These include ISDN backup on leased lines, facilities management of clients' web servers, and virtual FTP servers.
While wholly Irish owned, EUnet Ireland is affiliated to Europe's largest commercial Internet service provider, also named EUnet, comprising 26 other Internet service providers in 42 countries.
