Eircom is likely to be sold within the year because of the crisis of ownership facing its Australian owners Babcock & Brown Capital, senior people linked to the phone company have said.

Babcock and Brown Capital, the Australian-based fund that owns Ireland's dominant fixed line telecoms company and third largest mobile operator Meteor, is facing a crisis as the indebted company's shares have fallen sharply in Australia since the credit crunch started last summer. On Friday alone, shares fell by 33% at one stage as concerns mounted about the company's ability to raise funds and its current level of debt. Its chairman Pierre Danon stepped down last week.

"The probability is over 50% that it will be sold within a year, regardless of the credit crunch" a senior Eircom source told the Sunday Tribune. "The main reason is that the B&B share-holders are fed up and that is the reason that Danon went."

He said that the operational and market dominance of Eircom would mean that B&B Capital would not be forced to consider "a fire sale" but that the shareholders "will have to have their say".

Other senior Eircom managers said that, despite the crisis, it was unlikely that B&B Capital would spin off its mobile phone arm, Meteor, because the company's strategy has long been to keep together its dominant fixed-line network with a mobile phone operation. Meteor is performing strongly in the current market.

"There is a crisis in ownership but not in terms of operation. It still has a massive market share and good cash flows," a source linked to the company said.

Eircom strongly denied any sales plans when contacted by the Sunday Tribune last week.

Any sale would confirm Eircom as the most re-packaged and most sold national telecoms company in the world. After its original stock market flotation in July 1999, it was shorn of its mobile phone business in a shares deal when its mobile phone unit, Eircell, was sold to Vodafone in 2000.

Eircom's fixed-line business was sold to the private-equity fund Valentia consortium for €3 billion in 2001. In July 2005, Eircom reacquired a mobile phone operation when it bought Meteor from Western Wireless International for €420m, and, in late 2005, Babcock & Brown Capital first bought a stake in Eircom. B&B Capital subsequently bought out the company.

At the time B&B Capital executive Rex Comb said that Eircom would deliver value for the Australian-based fund "irrespective of reducing operating costs or increasing leverage."