NTL purchased the Irish company Cablelink last night in a deal worth £535 Million. Cablelink is Ireland's biggest cable and MMDS operator with an estimated 400,000 subscriber base. Cablelink had been owned by Telecom Eireann and RTE. According to Sean MacCarthaigh in the Irish Times, RTE will use the revenue generated by the sale of its shares to fund digital terrestrial televison project.

NTL will also introduce a telephone service to Cablelink subscribers allowing them to avail of an unmetered local call charge of 0.035 as opposed to Telecom Eireann's £0.115 charge per unit. The move would effectively rip the heart out of Telecom Eireann's domestic and commercial market as Cablelink's main network is in Dublin City and it also has the main population centres of Waterford and Galway. This coupled with internet access via cable has the capability to drastically affect the internet access market in Ireland.

It may also have a knock on effect on the flotation of Telecom Eireann in the next few months. Investors love monopolies but are not too keen on an open market. TE could quickly find itself being overtaken by commercial reality. As Telecom Eireann's monopoly crumbles, the threat posed by Cablelink is the most immediate.

To date Telecom Eireann has always had control of the last mile - the copper going into the subscriber's premises. Now with an alternative delivery route that is available prior to complete deregulation, TE has serious competition. It would be surprising if the stockmarket analysts pick up this shift in the balance of power as they seem to be caught up in the flotation fever.