ESAT Telecom is believed to be one of three possible bidders for the Internet service provider Indigo. Esat is understood to have recently held talks with Indigo about purchasing the company. Indigo, which employs 55 people, is one of the leading companies providing user access services for the Internet.

The company is 46 per cent owned by the managing director, Mr Shay Moran's family. Standard Life has a 20 per cent stake and Davy Stockbrokers' private clients hold a 9 nine per cent interest.

Meanwhile, Esat is expected today to announce a deal with CIE to use railway lines for a new national phone network.

The two companies have signed heads of agreement for an independent fibre optic telecommunications company. The network is expected to yield substantial savings for the group.