Strong growth in its mobile phone business and an extraordinary increase in the level of Internet usage were the main features of Eircom's maiden half-year results as a public company.

Profits before tax - when the exceptional gain on the sale of Cablelink is excluded - rose to €160 million (£126 million) from €144 million (£113 million), in the middle of the range of analysts' forecasts.

Analysts had forecast pre-tax profits in a wide range from €120 million to €200 million because of various distorting factors. But they said Eircom's strong performance in the high-margin areas, such as mobile phones, was encouraging.

The results presented few, if any, surprises and the absence of surprise was largely responsible for the profit-taking which knocked the Eircom share price back 18 cents to €4.12 (£3.24).

Investors who hold their shares until the December 3rd cut-off date will receive a dividend of 1.6 cents (1.26p) per share. This means that investors who bought £2,000 worth of shares in the July flotation will receive a dividend of just €10.42 (£8.21).

A breakdown of the pre-tax figures shows that profits from the fixed-line network before interest and goodwill costs fell €1 million to €136 million compared to the first half of 1998, although headline sales rose to €820 million from €805 million.

But the phenomenal growth of the Eircell mobile phone business is reflected in pre-tax profits of €34 million from €14 million. Eircell's turnover jumped to €219 million from €158 million, with 132,000 new customers bringing the total to 778,000.

Analyst Ms Jemma Houlihan of ABN-Amro said one noteworthy aspect of the Eircell figures was the average revenue per user of €50 per month, well ahead of the European average of €35 per month, although it is lower than Esat Digifone's figure of €58 a month. Digifone, however, has a much lower proportion of lower margin pre-paid mobiles than Eircell. Eircell's Ready-To-Go pre-paid phones accounted for 80 per cent of the company's customer growth.

The extraordinary increase in the level of Internet usage is indicated by the fact that 25 per cent of local call minutes is now accounted for by Internet use, compared to 12 per cent six months ago.

Eircom chief executive Mr Alfie Kane said Eircom, whose Internet service provider business accounts for around 50 per cent of the service provider market, is poised to benefit from this growth in Internet use.

Mr Kane said a strong Irish economy, strength in the mobile phone market and data communications drove the business and that he would continue to push the company further into mobiles, data and e-commerce.

"There is no question, in our view, that mobile data and mobile e-commerce will be major developments in the future," Mr Kane said. He added that Eircom would be seeking acquisitions in Britain.

Eircom failed in a bid to buy Horizon Computers this year, but finance will not be an inhibiting factor when it comes to funding acquisitions or capital expenditure. Net cash at the end of the half-year totalled €224 million, mainly due to the €408 million proceeds from the sale of Cablelink to NTL.