ESAT'S move into the residential market prompted a mixed early reaction from investors. The company's share price rose $3.00 to around $36.50 on the Nasdaq on Monday before slipping $1.25 the following day. However, Jemma Houlihan, telecoms analyst at ABN-Amro, is upbeat about the company's prospects. She expects Esat's involvement in the residential sector to be received quite well by investors, with its target market increasing significantly as a result of the liberalisation of the telecoms sector.

She says the company is confident that within 12-18 months, it should be able to reach its target of 10 per cent of the 450,000 customers who spend £100 every two months on their phone bills.

Liberalisation will also be good for other telecoms companies such as MCI WorldCom and Ocean, the British Telecom/ESB consortium. Ocean also unveiled its tariff package for residential customers on Tuesday.

Ms Houlihan points out that involvement in the residential market is a loss-making venture in the short term - certainly for the next year or two. But investors in telecoms take a longer view. And even if Esat's shares take a bit of a battering from time to time, the underlying trend is still impressive. The share floated at just $13 a year ago.