Investors trying to decide whether they should invest in Telecom Eireann shares will be comforted to learn that the telecommunications sector has been the top performer in Europe in the last year.

BCP Stockbrokers reports that the sector has yielded returns of around 60 per cent for European investors in the past 12 months, more than twice the rate of growth achieved in the other high-performing segments of the stock market.

With the potential for further profit upgrades and the increased use of mobile phone and data based communications systems, the omens continue to be highly favourable, according to the brokers. In the European sector, BCP favours British Telecom, the German group Mannesmann and Telecom Eireann as the best telecommunications stocks for investors.

This selection is based on their growth potential, market capitalisation, cash flow generation, balance sheet strength and the potential for further international alliances.