British Telecom, the ESB's joint venture partner in the Republic, yesterday announced a $10 billion (£7.1 billion) global venture with AT&T, the largest telecommunications group in the United States. The deal links two key carriers in the world's most competitive telecoms markets.

BT, which last year saw a planned $24 billion merger with MCI collapse, said the tie-up would offer multinational clients communications services "of an unprecedented scale, scope and level of quality".

AT&T and BT said they had benefited from the "priceless experience" of facing structural upheaval and competition some 14 years ago when BT was privatised and AT&T split up, while rivals had remained cosetted monopolies.

Last month, BT and the ESB announced a joint venture, Ocean, which will compete with Telecom Eireann from December. The £130 investment will see the new company focus initially on business and commercial customers, moving into the residential market later.

The new BT and AT&T alliance will offer one stop shopping for multinationals' communication needs between offices around the world - a market estimated to be worth more than $10 billion per year - and the two groups plan to become "undisputed leaders" in the industry.

The new venture will pool both groups' trans-border assets and operations, including international networks, all international traffic and corporate products, such as the expanding set of services from BT's global Concert corporate services project.

The venture, which has yet to be named, will be chaired by the BT chairman, Sir Iain Vallance, and will invest $1 billion per year to build a global telecoms network to carry shared international traffic.