THE conclusion of the planning problems facing the second mobile phone network are crucial for the Esat group of companies.

Esat Telecom Holdings - which owns 40 per cent of Esat Digifone - the second mobile phone operator - needs the cashflow it would get from the second network be coming operational. But delays in concluding a deal which would allow it access to Garda masts are threatening the February introduction date.

The shareholders in Digifone will have budgeted for initial losses in the start-up period, before revenues start to flow.

Esat Telecom Holdings made losses of £7.5 million in the nine months to the end of September. The investment costs in the new network well outweighed £7.8 million revenues from Esat Telecom's 2,000 business customers. Esat Telecom Holdings, is currently seeking to raise $70 million (£43 million) in loan stock in the US to fund further spending,

Esat Telecom Holdings and the other investors in Digifone need to earn cash flow from the mobile network as soon as possible to service existing borrowing, fund further investment and - eventually - provide something for the shareholders.