ESAT Digifone, one of the Republic's best known companies, will be rebranded 02 following its parent firm's decision to standardise branding across its mobile phone operations.

BT Wireless said yesterday it would introduce the new name- which is the chemical symbol for oxygen - from next spring.

The O2 rebranding will probably be Esat Digifone's second name change in a year following its decision yesterday to drop "Esat' from its title and introduce a new corporate logo.

At a launch in Dublin yesterday, Ms Danuta Gray, chief executive of Esat Digifone, said the company had decided to drop the Esat title to create "clarity for our customers".

Digifone marketing director Mr Derek Handley said market research had shown changing the name would end confusion many people had about Digifone and other Esat companies.

Despite the fact the new logo and name change will be replaced by the O2 brand next year, Mr Handley, dismissed suggestions that yesterday's rebranding to Digifone was a waste of money.

He said about 95 per cent of the cost of advertising and marketing the new corporate identity would come from existing Digifone budgets. Ms Gray said the rebranding was necessary as Digifone was no longer part of the Esat group following BT Wireless' demerger from British Telecom earlier this year.

She said it would be sensible to introduce the O2 brand next year and to build the company's spend into that brand. But no specific date had yet been decided, she added.

Digifone is one of five BT Wireless mobile subsidiaries which will merge under the O2 brand. The others are BT Cellnet, Viag Interkom, Telfort and Manx Telecom.

Ms Gray said the merger process would not result in any redundancies from Digifone's core 1,000 strong workforce, contrary to a recent UK newspaper report.

The group may consolidate some technical or IT activities but consolidation did not mean centralisation, she added.

Meanwhile, Ms Gray said Digifone may not offer consumers faster high speed internet mobile phones which use general packet radio services technology until after Christmas.

She said that Digifone was happy with its network technology but that it would wait until there was a sensible volume of handsets in the marketplace before launching.