Eircom's management has submitted preliminary proposals to the communications regulator ComReg, it was confirmed last week, and is ultimately expected to seek a trade buyer for its retail arm and mobile business Meteor.

Industry commentators intimate the smart money would be on a European telco such as France Telecom or Deutsche Telecom stepping in to buy Eircom's 1.1m retail customers. It's expected Eircom would place a 1bn price tag on its retail business and 800m for its Meteor arm.

The current weakness of the dollar militates against a US operator buying Eircom Retail, although AT&T is reportedly interested in European operations and Ireland could provide a "foothold".

Swisscom is another possibility and has the cash reserves to acquire Eircom and would not have to raise capital during the current period of global liquidity issues.

"The real value is in the wholesale side where the easy money is to be made in providing infrastructure to telcos and Babcock are going to keep a tight hold on that, " said one industry veteran.

The other possibility is an IT services company buying Eircom's retail division as a means of getting its foot in the door of Eircom's large corporate and public contracts. "Industry convergence can work both ways, " said one industry insider in reference to the growing trend of telcos providing combined connection and IT hardware maintenance.

Fujitsu and Accenture are possible, but neither company has any real experience in the communications business.

"There is the chance a services company come in and use Ireland as a 'sandbox' to learn the business, but it would probably look to segregate [Eircom's] big corporate and government contracts before selling on the consumer business, and ComReg might have something to say about that, " said a telecoms consultant with an Eircom competitor.