Esat's results for the fourth quarter and full year 1998 show that the group had net losses for the year of £44.2 million (€56.3 million) compared to full-year losses of £40.1 million (€51.1 million) in 1997.

The increase in losses are due almost totally to the start-up costs associated with the launch of the Esat Clear residential telephone service towards the end of the year.

The net income figure was also boosted by an exceptional £2.6 million gain on the sale of a building to Esat chairman Mr Denis O'Brien which has been leased back by the company.

The 1998 results include a loss of £10 million in respect of Esat's then 45 per cent stake in mobile phone operator Esat Digifone, compared to a loss of £16 million in 1997. But Digifone moved into operating profits for the first time since its formation last year, with earnings before interest, tax and depreciation of £800,000 on sales of £117 million.

Since the end of the year, Esat has increased its stake in Digifone to 49.5 per cent by buying 4.5 per cent of the mobile phone group from Mr Dermot Desmond. Telenor also bought 4.5 per cent of Digifone from Mr Desmond and now has an equal 49.5 per cent stake.

According to Esat, Digifone had 240,000 customers at the end of 1998 and has increased its customer base to 275,000 since, giving Digifone 44 per cent of the Irish GSM market and 31 per cent of the total Irish mobile phone market.

Digifone is to increase its capital expenditure by a further £100 million in the current year from £63 million last year.

Esat Telecom's doubled its level of billable minutes in 1998 to 210 million minutes, but comparisons between the third and fourth quarter of 1998 show a slowdown in growth on the fixed side of the businesses with growth in billable minutes virtually unchanged from the third quarter at 59.2 million minutes. "Most of the strength has come from better pricing because of a higher proportion of data-based products", said NCB analyst Mr Ciaran O'Neill.

By the end of 1998, Esat had completed 890 kilometres of its national fibre optic network and has now signed a £11 million contract to install Esat II, a 240 kilometre fibre optic cable linking Dublin with Southport in the UK. Esat II is scheduled to be completed in the third quarter of this year.