Eircom chief executive Rex Comb indicated that it was by no means certain the company would accept the 3G licence, which would enable it to provide high-speed internet, video and other data services through its mobile division Meteor. "I'll evaluate that on a realistic basis versus the other scenarios, " he says. "The licence is there to be had but we're not bound to accept."

Comb said the technology was interesting but that the business case for 3G has not yet been proven. He said he hasn't yet seen a use for the high-speed data service that will prove a winner with consumers. "Certainly I think there doesn't seem to by any killer application."

Smart recently lost a High Court case against the regulator, Comreg, through which it sought to prevent the licence being withdrawn and offered to Eircom in accordance with the rules of the public tender process governing the licence award. It has 28 days from the date of the High Court decision on 31 October to appeal but is thought to be unlikely to do so. In the absence of an appeal from Smart, Comreg would be free to offer the licence to Eircom, which finished second to Smart in a tender process last year.

At the moment, 3G probably looks a luxury for Comb.

Eircom, which announced half-year results last week, has made considerable progress in the Irish mobile market since acquiring Meteor in July 2005. Meteor added 51,000 subscribers in the six months to the end of September, bringing it up to 750,000, and ringing up turnover of 494m and earnings of 24m in the process.

But while mobile is an increasingly important part of the business, Eircom's owner, Babcock and Brown Capital, is already thinking about selling off other parts of the company it acquired just three months ago. Eircom has held "preliminary discussions" with the government about the possibility of splitting the company in two and selling off its retail division, according to Comb.

He said the company was still exploring the possibility of doing so but that the deliberations both within the company and with the Department Of Communications were still at an early stage. "It's something that we're prepared to look at, no question about it, " he said.

"It's just a thought. At the moment we're just concentrating on running the business".

Disposing of the retail side of the business, which sells voice and internet services to business and residential customers, could lead to a re-rating of the network asset, Comb said.

"Clearly, if you look at other infrastructure assets around the world, water or electricity, they trade at higher multiples."

Spinning out the retail side to leave Eircom as a pure infrastructure play, in theory, would increase its value. "We think it would, intuitively, " said Comb.