What is this deal worth to Eircom shareholders?

Eircom shareholders will get 0.9478 Vodafone shares for every two Eircell shares they will hold after the demerger. They will continue to hold a stake in Eircom. The actual cash equivalent in euros will fluctuate with both the Vodafone share price and the sterling exchange rate. On the basis of yesterday's closing Vodafone price of £2.41 sterling the cash equivalent equates to £1.14 sterling or €1.84. The shares being issued by Vodafone account for €4.25 billion of the €4.5 billion purchase price - based on Vodafone's closing price on Wednesday - with the remaining €250 million constituting debts taken over by Vodafone.

Is the value of the deal subject to stock market volatility?

Very much so. Vodafone shares have fluctuated wildly this year along with other companies in the sector; ranging from £2.27 sterling to £4.01 sterling. If the price falls below £2.20 then Eircom can pull out of the deal.

When will I get my Vodafone shares?

In February you will receive a communication outlining the deal and inviting you to a general meeting in March. If the deal is approved you will be allocated your Vodafone shares within a short time, but are unlikely to receive your share certificate for some further days.

Do I have to pay any tax?

No. The deal has been structured so that Irish-based shareholders do not have to pay tax.

Is it a good deal?

Eircom management say that it is a good deal. They point out that the entire business was worth only €5.4 billion before the news of the talks broke. But the value of the Vodafone deal is substantially less than the €5.1 billion which was originally mooted. The main reason for the difference is that the value of telecom shares has fallen over the last few months.

Will I ever recoup my investment?

Not in the short term. On the basis of the Eircell sale you will get around €2.00 per share of your investment back, assuming the Vodafone share price and sterling do not fluctuate and ignoring the fees you will incur if you sell. If Eircom sells its fixed line business or is taken over you could get between another €1.00 and €1.40 depending which analysts you believe. It will still leave you shy of your €3.90 purchase price if you got in at the flotation. Your best bet in the short term is to hope for a significant appreciation in Vodafone shares before the deal closes in March. Otherwise you could hold onto Vodafone and hope for a recovery in telecoms generally that will lift the value of it and Eircom.

What is the outlook for Vodafone?

Good. It is the world's largest telecoms company and one of the 10 largest overall in terms of market capitalisation. It has 62.5 million customers and made profits of £17.4 sterling billion last year. It dominates the industry and is in a position to control its own destiny in a way that Eircom never will be able to. Mobile is seen as the future of telecommunications but this view is not shared by everybody.

How can I sell my Vodafone shares when I get them?

A low-cost dealing service will be set up to allow small shareholders sell.

What do the big shareholders think?

Comsource, the Dutch-Swedish consortium which owns 35 per cent of Eircell, supports the deal. It seems happy to accept Vodafone shares but has had to commit itself to not selling for 30 days after it gets them. This does not mean it will start selling once the 30 days are up. Both have made it clear that they have no interest in staying involved with the Irish company but - according to Eircom - have agreed not to sell their Eircom shares for three months post the deal going through.