Eircom has been given temporary court protection from its creditors.
Michael McAteer of Grant Thornton chartered accountants has been appointed interim examiner to the Eircom group of companies, which has debts of over €4bn.
The court was told the telecoms group, which includes ITI and mobile operator, Meteor, requires restructuring and investment if it is to survive.
In his ruling Mr Justice Peter Kelly said that what has happened to Eircom since its privatisation in 1999 "makes sad reading".
He said every takeover bar the last has resulted in dramatic increases in the group's debt, which started at €500m and now stands at a crippling €4bn.
“We welcome today’s High Court order and Mr Justice Kelly’s acknowledgement of eircom’s strategic importance to the State," Eircom Chief Executive Paul Donovan, said.
"It is business as usual at Eircom during the examinership process.
"Customers can be reassured that all voice, broadband and data services will continue. In addition, the company will honour all outstanding work and payments to suppliers.
"Staff will continue to be paid on time."
Mr Donovan said Eircom fully intended to honour its existing investment commitments, including fibre rollout to deliver high speed broadband and TV services.
This network upgrade is already underway and new services should be offered later this year," he said.
The examinership is reported to be the largest in Irish corporate history.
Under restructuring proposals, Eircom’s gross debts would be reduced from about €4bn to about €2.35bn.
The proposed business plan being inspected by Judge Kelly would also see up to 1,000 of its 5,500 staff let go, and the retraining and recruitment of staff for new operations.
Eircom said there would be no direct impact on employees or services to customers and staff would continue to be paid on time.
Mr Donovan announced yesterday he was planning to step down at the end of the year.
The examiner’s role is to inspect company affairs with a view to determining and recommending an appropriate proposal for Eircom as a going concern.
This proposal must in turn be approved by the High Court.
The process runs for a maximum of 100 days.
Steve Fitzpatrick, general secretary of the Communications Workers' Union (CWU), said the court action had been almost inevitable.
“The massive debt burden loaded up on the company through a series of cash grabs by the procession of its previous owners has meant that there was always a probability that it would ultimately need the protection of the courts to sort this mess out,” he said.
“This day has now arrived.”
Mr Fitzpatrick said the examinership should help create a stronger company, better equipped to rebuild for the long term.
The CWU is planning for negotiations with management on potential job cuts.