TELECOM PLAYER BT Ireland is transferring its small business and consumer customers to Vodafone in a deal valued at €4.8 million.

The two companies announced yesterday that they were establishing a partnership which they said would boost competition and network investment in Ireland.

As part of the deal, BT is transferring its small business and consumer operations to Vodafone, and will provide fixed-line network services to Vodafone for a seven-year period.

The transaction is subject to the Competition Authority’s approval.

If it goes through, it will mean that BT Ireland’s 84,000 domestic customers and 3,000 small business clients will receive their fixed-line services from Vodafone.

In turn, this means that Vodafone, currently the Republic’s biggest mobile operator, will also become its second biggest fixed-line broadband player.

It entered that market in November 2007 when it bought Perlico for a reported €60 million.

The deal announced yesterday will leave it with 170,000 customers and a 15 per cent market share.

The deal will allow BT to focus on providing networked IT and telecoms services to big businesses and the public sector.

It is one of the biggest players in this sector and recently won a contract from the Government to operate the emergency 999 service.

Vodafone’s rival in the mobile market, Spanish-owned Telefonica O2, has outsourced its network operations to BT.

According to a joint statement yesterday, the gross value of the asset being transferred from BT to Vodafone was €4.8 million on March 31st, 2009.

However, neither Charles Butterworth of Vodafone nor BT Ireland’s Chris Clark would confirm yesterday if money was changing hands.

They said that the number was included in the statement to satisfy regulatory requirements, as both were listed on London’s Stock Exchange.

BT plans to step up its efforts to build an independent telecoms network in the Republic, a move that it says will boost competition and broaden the level of services.

Key to this is getting access to the connection between the exchanges, owned by Eircom, and the customers.

BT said yesterday that it had done this in 22 exchanges and plans to open up a further 58. This will account for two-thirds of all Eircom exchanges.

Eircom has been slow to open up its exchanges to rivals. According to Mr Clark, the cost of getting access to the exchanges is still the highest in Europe, but it has come down.

He said BT would be spending “multi-millions” on the independent network, but would not give a specific figure.

BT employs about 3,500 people in Ireland.

The company’s businesses here generated revenues of €927 million for the year to the end of March 2008.