Communications regulator ComReg has awarded contracts worth over €2.8 million to three consultants to advise it on the proposed break-up of Eircom by its owners Babcock & Brown.

LECG, a global consultancy with offices in London, has been awarded two contracts worth €1.4 million. It will advise ComReg on strategic, operational and regulatory issues.

Oxford-based economic consultants Oxera has won a contract valued at €712,846 to advise on economic and regulatory accounting issues. Bank of Ireland subsidiary IBI Corporate Finance has won a similar size contract to give ComReg guidance on corporate finance issues.

Last December, ComReg chairman John Doherty said the regulator had no power to prevent the the break-up of Eircom into separate companies. Mr Doherty said ComReg's main concerns were to ensure Eircom met its universal service obligation and that competition would be enhanced.

Babcock & Brown executives have consistently maintained that splitting Eircom into two companies - a network operator and a seller of retail services - is the best way to maximise the value of their investment. The Australian firm took over Eircom in a €2.36 billion deal in 2006.

Last year, it presented a plan for the break-up of the company to the Department of Communications, Energy and Natural Resources and to ComReg. It is understood to offer the Government a minority stake in the new network company, provided the State-owned fibre optic networks are rolled into it.

It is expected that Babcock & Brown would sell off the retail company, which would have just under a 70 per cent market share, to a European telecoms operator.

The other licensed operators are opposed to the move to break up Eircom, saying it would hamper competition and not encourage Eircom to invest in its network infrastructure.