ESAT Digifone expects to finally sign the licence to operate the second mobile phone system within the next fortnight. The company received a final draft from the Department of Transport, Energy and Communications last week, according to a spokeswoman.

The new service would be running in the autumn as planned, despite the delay in signing the licence, she added.

Esat Digifone is a consortium comprising the private Irish telecommunications group Esat Telecom, the Norwegian state phone company Telenor, and Mr Dermot Desmond's investment company, International Investments and Underwriting.

Esat Telecom and Telenor have 40 per cent each, which IIU holds 20 per cent at present. However, these shareholdings are expected to change, with IIU's stake increasing to 25 per cent.

Once the licence is signed, a £15 million fee will be payable to the Government. Esat Telecom has the necessary finance in place to meet its share of the licence fee and the £100 million cost of constructing the new network, according to the spokeswoman. The company is currently in the process of raising £30 million in the US debt markets and expects to complete the fund-raising over the next two months.

The money will be used to meet Esat's share of the cost of the new network and also to expand Esat Telecom's long-distance landline network, which competes with Telecom Eireann.

As part of the fund-raising, Esat Telecom and its stake in Esat Digfone are being spun off from the parent company, Communicorp, which is controlled by Mr Den is O'Brien.

The fund-raising "has turned out to be a longer process than expected", according to one US fund manager that is considering investing.

Esat Telecom had originally being looking to raise £15 million in convertible loan stock and another £15 million in convertible second preference shares.

The company is now seeking to raise £22 million in convertible loan stock, with another £8 million in debt being arranged through AIB.

The price of the convertible stock has not yet been set, and the fundraising process could take up to another 40 days to complete, according to the Esat spokeswoman. Convertible loan stock can be exchanged for shares in the company which issues it.

The US fund manager expressed confidence that Esat would raise the funds but possibly not at the price originally sought.

Esat's spokeswoman said that the company had decided to increase the amount of convertible loan stock sought because of the positive response from US investors.

However, the change of strategy was described by US sources as "a neutral signal" as to how the fund-raising was proceeding. Uncertainty surrounding the status of the call routers used by Esat Telecom is a cause of concern to possible investors, according to one US fund manager.

The routers, or auto-diallers, are fitted to Esat Telecom's customers' phone systems and automatically pick up long-distance calls and divert them to the Esat Telecom network instead of Telecom Eireann's.

Some of Esat's competitors have complained about its use of routers, but the company spokeswoman said: "There is no problem with the use of auto-diallers. Esat is working within the terms of its licence and the relevant EU directives. It is not an issue in so far as investing in the company is concerned.

Esat Digifone received a draft of the licence from the Government last week, according to Mr Arve Johansen, the managing director of Telenor International.

The licence should be signed shortly, he said.

The consortium was proceeding with its plans and expected to have the new network up and running by the target date, Mr Johansen confirmed.