Advisers to Swisscom have opened talks with the trust that holds 20.6 per cent of Eircom on behalf of its staff and retirees, sources familiar with the process said yesterday.

While this dialogue is in only its opening phase, the Eircom employee share ownership plan (Esop) is considered likely to engage in a transaction with the Swiss company if a way can be found to offer Swisscom shares as an alternative to cash. Such a structure would be the most tax-efficient for Esop members.

But of greater interest to Eircom and Swisscom at this stage is the stance of the Australian investment fund Babcock & Brown Capital and its affiliates, which owns 12.5 per cent of the Irish company. It is not yet known whether the Australians will do business with Swisscom at its indicative price of "a tad above" €2.40 per share.

While its 12.5 per cent stake would not be enough on its own to block a transaction, there is recognition it could complicate the process by putting pressure on Swisscom to increase its offer even in the absence of another bid. There is also some concern that the group could act in concert with hedge funds to drive the price up. "They could make life very difficult," said one source.

Swisscom chief executive Jens Alder said yesterday that his company preferred to control a company it wanted to buy. "With a minority there is no control for us whatsoever, so it is a rather risky thing to do, and we are not able to create value by introducing our know-how."

Mr Alder was speaking as Swisscom released quarterly results that showed a 44.6 per cent rise in its attributable net profit to €1.08 billion. The increase was greater because of one-off charge that depressed its profit a year ago. He offered only scant information about the takeover process at Eircom. "We want to invest overseas, that has not changed," he said.

"In the last five years there has not been a single moment that we did not have three projects running at the same time. That is also the case today."

While Swisscom is also a bidder for the Danish group TDC, the most recent reports suggest that its offer tails bids from two private equity consortiums. Mr Alder also indicated that Swisscom would suspend its share buyback programme should it do a deal with Eircom or any other group.

Eircom's pension liabilities and the scope of its public telephone contracts with the State will be scrutinised in Swisscom's due diligence examination of its books.

As this process gathered pace, Eircom revealed yesterday that it had signed a contract to transfer 200 of its call centre staff to the British group Capita. The deal is worth some €35 million over five years and staff have the option to transfer to Capita and to retain their existing terms and employment conditions, Eircom said.