ESAT Holdings, the holding company for Esat Telecom and one of the two major shareholders in Esat Digifone, has raised a further $35 million (£24 million) through a US bond issue. Institutional investors including Capital Research, Salomon Brothers and Eaton Vance are to participate in the funding.

The latest funding brings to $165 million the funds raised by the company in bond and equity offerings over the past 14 months.

The company says the funds will be used to "build and operate a local, national and international fibre optic infrastructure".

The chairman of Esat Holdings, Mr Denis O'Brien, said yesterday it was likely the company would look for further US funding.

One of the results of the new funding will be the construction of a £7.5 million fibre optic submarine cable between the Republic and the Britain.

According to the company, the cable will have a higher capacity than any cable coming into the Republic at present.

"Since over 50 per cent of all international calls are from Ireland to Britain, the construction of this link will present a very viable competitive facility for Esat Telecom and will allow the company to offer a range of broadband data services to its customers," said Mr O'Brien.

The cable, which will run along the bottom of the Irish Sea, will be in service by the end of February 1998.

Mr O'Brien said Esat Telecom's own infrastructure network would allow the company to "eradicate a significant proportion of the Telecom Eireann connection charge from its pricing structure".

The EU Commission is currently deciding on the connection rate charged by Telecom Eireann. Esat Telecom claim the rates charged by Telecom represent a barrier to competition but this is rejected by Telecom Eireann.

Esat Digifone now claims to have 45,000 customers, which represents 23 per cent of the market. This is with 87 per cent coverage, according to the last available figures.