Ireland is estimated to be the fourth fastest growing market in Europe for mobile phones, following Spain, Italy and Belgium. Market penetration - the number of people using mobile phones - has risen to 12 per cent in 1997, up from 8 per cent one year ago.

Eircell is claiming around 350,000 subscribers, on both its analogue and GSM systems. Esat Digifone predicts it will top the 100,000 mark by the end of the year.

The move to mobiles has been spurred by a combination of factors - a booming economy, lower prices and a second operator in the market. A third operator, who could be in the market by the end of 1999, would provoke further price cuts.

Esat Digifone's chief executive Mr Barry Maloney says he sees no reason why the market cannot grow at the same rate next year. "By then we would be up to 18 per cent penetration in the market," he says.

Some of the best examples of mobile phone market growth are the Scandinavian countries. Sweden is now estimated to have 37 per cent penetration. "A couple of years ago, the industry was saying 30 per cent penetration would be the cut-off point, " says Mr Maloney, "now they are talking about 50-60 per cent".

Others says that one issue in the future will be the convergence of fixed and mobile phones - and how they will be combined. It is an issue which is occupying the minds of operators from a technical and accounting viewpoint.

Mr Maloney says the price of handsets has also fallen sharply, by around 50 per cent in the last year. This can only help the market, he says. The issue of price in the market is a sensitive one. Many observers believe that because there are only two operators - Digifone and Eircell, which is the state operator - the market is a duopoly and they do not really compete on price.

Mr Maloney maintains that Digifone is cheaper, its pricing is easier to understand and the system is carefully tailored.

Eircell bundles in free airtime with its rental. The two companies are approaching the market differently. Eircell is mounting an aggressive market offensive, branding its name at every possible opportunity, while Digifone is taking a somewhat lower key approach.

As the competition begins for a new entrant to the market, many question whether another operator will emerge. They say the incumbents are winning market share so quickly it may not be attractive to get involved.