Still no news yet on when Esat Telecom is going to take its Dublin listing, but company broker Davy is ensuring that potential investors are fully aware of the attractions of the State's number two telco. For the second time in the space of two months, Davy has produced a research report on Esat - an unusual level of research.

In fairness, since Davy did its first report on Esat in December, the shares have gone ballistic on Nasdaq, rising as high as $54 (€47.6) before settling around $47-$48 in the past few days. The surge in telco shares worldwide and also the merger mania, culminating in the Vodafone/Airtouch and Telecom/Telia deal, have provided fertile ground for the Esat share rise even though it will be another four years before Esat generates a pre-tax profit.

But Davy sees further growth in the share price and believes that a sum-of-the-parts exercise suggests a $60 price without taking any account of the valuations of the likes of Colt Telecom or Energis.

And Esat Digifone - 45 per cent owned by Esat, 45 per cent by Telenor and 10 per cent by Dermot Desmond - should begin turning a profit by next year. The Telenor situation is intriguing, as either Telenor and Telia will have to sell their respective Digifone and Telecom Eireann shareholdings as a result of their merger. Telenor has since said that it has no plans to sell its Digifone holding and indeed, Telia is seen as a more likely seller of its Telecom stake - possibly into or shortly after June's initial public offering.

This, however, would leave the Swedes open to the clawback arrangement where the Government could recover 60 per cent of "excess return" above a certain threshold. But, one way or the other, either Telia or Telenor will have to exit the Irish telecom sector, and whether the Digifone or Telecom stakes are sold will be a decision for the merged Telia/Telenor board.

If the decision is for a sale of the 45 per cent of Digifone, then Esat has first option to buy - but that would be expensive given that Digifone is within a nose of moving into profits. The other option is to sell to the likes of Orange or alternatively Digifone could embark on an IPO, with Telenor selling its stake into such a flotation.

Some big decisions to be made in Oslo and Stockholm.