Eircom may have produced a solid set of financial results in its debut year on the Irish stock market. But analysts believe that it will be some time before the telecom group's small shareholders can expect a rise in the share price.

The weakness in the sector, the continuing uncertainty over the Telia stake and uncertainty over how Eircom will be affected by increased competition are the main factors which will inhibit growth in the share price.

The 1999 results from Eircom - marginally ahead of market expectations - show the continued diversification away from its fixed-line business with very strong growth in its mobile phone and Internet businesses. Eircell's mobile phone customers broke through the one million mark with turnover up 40 per cent to €487 million and EBITDA (earnings before interest tax and depreciation up over 26 per cent to €129 million.

One of the priorities in the mobile phone business, said chief executive Mr Alfie Kane, is to find a mechanism to enter the British mobile market and get seamless roaming. On Eircom's bid attempt to secure a third-generation licence in the UK, Mr Kane said: "The obvious option is to have our own licence. We bid aggressively and sensibly and went to £2.5 billion, we believed that was as far as we could go and have a reasonable business".

He declined to be drawn on whether Eircom might try to lease capacity from one of the successful 3G licence bidders in the UK. "There are different options with different players, but the key objective is to find a means to get seamless roaming in the UK."

Industry sources believe that Orange - which failed in the courts to overturn the third mobile phone licence award to Meteor - is one potential partner.

The Internet and multimedia are the other main potential growth areas for Eircom, given the increased competition it will face in its fixed line business following the unbundling of the local loop. A key element of this is the flotation of all or part of the Internet business in October/ November with Eircom probably floating 25 per cent of the business on the market.

Mr Kane said that between Eircom.net and Indigo, Eircom has an estimated 60 per cent share of the Irish Internet provider market. Plans are well advanced to invest in a number of e-commerce start-ups and the group is also looking at a range of options to speed up development of its business-to-business, business-to-consumer and eTV activities, including further acquisitions and joint ventures.

Mr Kane would not be drawn on the structure of the Internet IPO but said: "We want to put substance on it - like revenue and profits." This is seen in the markets as a determination not have the companies treated like typical dot.com investments. One analyst speculated that apart from including Eircom.net and Indigo ISP business, Eircom will bundle its Golden Pages and directories businesses, which had sales last year of €40 million, into the floated business.