The race is on to be the first company to bring digital television into Irish homes. And its not just about bringing hundreds of channels to a remote control near you.

The television relay companies will also be giving viewers a high speed Internet services as well as a telephone line - all in the same package. In the jargon so loved by the telcoms industry it is called bundling but what it means is the sudden death of the passive couch potato who will be born again as an interactive e-tv consumer who will be heavily courted in the new, highly competitive market.

By the end of 2001 there will be four digital television companies in operation: ntl: (formerly Cablelink); Irish Multichannel; Eircom and an as yet undecided DTT (Digital Terrestrial Television) company which will operate using what were once RTE masts.

Ntl: and Irish Multichannel (IMC) are running neck and neck. Both are engaged in expensive cable updating. Ntl: is spending £500,000 (€634,870) per day digging up the roads mostly along the east coast and replacing 25 year old cable with new fibre optic cable.

IMC, whose broadcasting remit is mostly concentrated in the south, is spending £300 million updating its system and has already recabled about a quarter of Cork city and will start extensive recabling in to Limerick soon.

Ntl: say that it will begin transmitting its digital service in the last quarter of 2000 and will roll out the service over a three-year period. IMC has a similar timeframe and is set to begin a trial run of the service in 500 homes in early September before it becomes more widely available around Christmas.

In the new digital environment the enthusiasm that Irish consumers have always had for mulitchannel television now presents an enormous threat to Eircom. Some 1.2 million households have a telephone and nearly half of these are already signed up for a multichannel service with either ntl: or IMC.

Now that those companies are in a position to offer high-speed telephone services as part of an attractive package, the pressures on Eircom are clear. Furthermore, from November of this year, consumers will be able to take their phone numbers with them when they change telephone suppliers which removes a significant psychological and practical hurdle in changing telephone companies.

Eircom is fighting back and has plans of its own to introduce a bundled package which will include digital television. Using a new technology called ADSL which beefs up the ordinarily phone line network to carry television signals, the company hopes to be in a position to compete with the two cable operators sometime next year.

It has been speculated that Eircom is pumping £500 million into refining the ADSL system but the company is uncharacteristically tight-lipped about the figures involved and its plans. At this stage it will only say that it has tested the network and is now moving into the second stage of operational trials which involves testing the various services feasible over ADSL - for example video on demand, fast Internet, email on the tv, broadcast tv and e-commerce. The fourth digital service provider is as yet unknown. What is known is that the service will be a DTT system (digital terrestrial television) as it will be broadcast using what were RTE transmitters. These are being updated at a cost of £30 million and, once the Broadcasting Bill is passed, someone will be able to buy a 72 per cent share in the transmitters that were wholly owned by the State broadcaster.

DTT's advantage over the cable companies is that it will cover the entire State and the cost of updating the system is modest when compared with the investment required of the other three companies. It is likely that ntl: and IMC will consider buying into this DTT system to increase their coverage.

Receiving the digital signal does not require a new digital television, but viewers must have a set top box. In the UK the first major rivals in the market, Ondigtial and Sky, initially charged upwards of £300 for the boxes but once competition heated up, both companies gave the sets away free. It is unlikely that any digital operator in Ireland will try to charge for the boxes.

Ntl: and IMC are spending £100 million alone on these boxes and choosing them is said to be one of the factors delaying the introduction of the service. As Mr Willie Fagan, Director of Public Affairs for IMC put it, the technology is moving so fast, no one wants to choose what could become the betamax of set top boxes.

Thanks to its £6 million advertising and marketing campaign, ntl: is making the most noise in the market at the moment. IMC is set to follow in September when it launches its new name, rebranding and marketing strategy. The company recently acquired Suir Nore Relays and Cable Management Ireland which encouraged a rebranding.