Eircom shares rose strongly in heavy trading on both Dublin and London markets yesterday after reports that France Telecom may float its Wanadoo Internet service provider (ISP) subsidiary sent investors scurrying into European telecoms stocks.

Eircom traded up to a high of €4.79 before finally closing up 24 cents on the day on €4.74. This compares with last July's flotation price of €3.90 and means that Eircom's army of half a million shareholders is currently sitting on a paper profit of almost 22 per cent on its investment. Given the strength of demand for telecom yesterday, dealers expressed some confidence that Eircom may at least hold these gains and may even move higher from last night's close.

Eircom operates two ISPs - Indigo and Eircom Net - and is one of the biggest providers in the Irish market.