Esat BT, the State's second-biggest fixed-line telecoms firm, will offer consumers a high-speed internet service at a flat monthly fee of €49.49 from next month.

The firm is also in talks with internet giant AOL about providing a platform that would enable AOL to launch Irish-specific services. The decision by Esat BT to talk to AOL about offering wholesale access to its internet services suggests further competition could take root in the internet sector.

AOL is the biggest internet service provider in the world and has amassed some 35 million consumers in the US, France, Germany and the UK. The firm is aggressively pushing the uptake of broadband and recently launched a $35 million (€32.5 million) advertising campaign to attract users.

An AOL spokesman confirmed yesterday the US firm had made inquiries about introducing a dial-up Irish internet service but had not yet made any decisions.

He said no talks had been held on whether to offer a high-speed internet service in the Republic.

But industry sources in the Republic believe AOL is considering introducing such a service.

Esat BT's new IOL Broadband product - which is based on digital subscriber line technology (DSL) - will initially be available to 700,000 homes. This will be extended to about one million homes by January 2003 as Eircom rolls out its own i-stream DSL service further.

Esat BT's IOL Broadband service costs 10 per cent less than Eircom's i-stream product and could potentially force further price cuts from the incumbent.

Eircom launched its own consumer DSL product last week after a delay of several years. Just 5,000 people have subscribed to DSL since May 2002, mainly because of its high cost until now.

Esat BT and Eircom's new consumer DSL services together with the entry of several new providers including UTV, Netsource and potentialy AOL should result in a broader uptake of the technology.

Technology, page 7