Esat will bid for Cablelink in partnership with one of the largest cable companies in the United States, The Irish Times has learned.

The Irish telecommunications firm has teamed up with Charter Communications, which is owned by the co-founder of Microsoft, Mr Paul Allen.

Since being named as one of those intent on purchasing the State-owned cable company, analysts have speculated that Esat would try to find a partner for the bid.

Some pointed to Esat's lack of experience in the cable business, others to the likely price tag for Cablelink of around £350 million (€444 million), a figure which would stretch the Irish firm's finances.

It was not clear last night precisely how much of a stake Charter would hold in Cablelink if the partnership succeeded in its bid, but it is understood that a third investor has been approached to prevent either the US or the Irish company from holding a majority.

Charter Communications was founded in 1993 and has expanded rapidly.

With headquarters in St Louis, Missouri, the company was ranked last year as the eighth most rapidly-growing company in the United States.

In January, Mr Allen - the technology investor who along with Mr Bill Gates founded Microsoft - bought Charter for $4.5 billion (€4.2 billion). In the months since, it has continued to expand, acquiring several more cable companies and becoming one of the top 10 US firms in its sector.

The main reason Charter appears to be an attractive partner for Esat lies in the US company's business focus.

In recent months, it has spent millions of dollars upgrading its cable networks in California, Illinois, Louisiana, Texas, Massachusetts, Connecticut, Georgia, Colorado, Utah, Missouri, Wisconsin, Kansas, Kentucky, Tennessee, Alabama, North and South Carolina, Montana and Indiana.

The main thrust of this series of upgrades has been to provide customers with extremely rapid Internet access through their television cable. The company now offers Internet access at speeds up to 50 times faster than a standard 28.8 Kbps modem. This makes downloading of video and music via the Internet practicable, and commercially viable.

Exactly such an upgrading of Cablelink's network will have to be carried out by whomever buys it.

Industry analysts say this would cost around £200 million.

Because Esat Telecom has already laid fibre optic cable beneath much of Dublin - the heart of Cablelink's network - the revamp of the cable network would be easier for it than for others.

In more general terms, the partnership makes sense.

Between the two companies, there is a wealth of experience - Esat's in the Irish telecommunications market, and Charter's in the cable television and Internet business.

Several other companies are making bids for Cablelink, including TCI, the largest cable company in the US, in partnership with Independent Newspapers; the Dutch firm UPC; NTL Cabletel; and Cable Management Ireland.