British Telecom (BT) and the ESB have pledged to attack the telecoms market aggressively, using a new joint venture telecommunications group which will initially target the corporate sector.

The two companies are to invest £75 million over the first five years, rising to £130 million within 10 years. The company expects to roll out its service by April and will eventually employ 300 people.

The two companies formally announced the joint venture yesterday, after the ESB board signed off on the deal in the morning. They promised to compete on price and said they would provide certain services for the residential market, provided these were allowed under existing telecommunications legislation.

As the law stands, alternative carriers are free to offer services to business and certain value added services to ordinary consumers. However, they are not yet allowed to compete in the residential voice telephony market.

The joint venture aims to be the number two carrier in Ireland, after Telecom Eireann. The company is expected to provide stiff competition for Esat Telecom, which has in excess of 3,000 customers in the corporate market, and WorldCom, formerly TCL, which is also growing its customers rapidly.

Although refusing to give specific figures, Mr George McGrath, British Telecoms Business and Development Director in Northern Ireland, acknowledged that achieving a 20 per cent share of the business market would not be unrealistic.

The joint venture, more details of which will be announced at the end of January will have immediate access to the ESB's digital microwave network. It will also use the company's overhead electricity cables and ducts to expand the network.

Mr McGrath said the microwave network would give the company a fast start into the market. The company's first task will be to link business parks in large urban areas and provide access to its global telecommunications services through the BT Concert services.

Mr John McSweeney, an executive director with ESB International, said the overhead cables will be used to throw fibre cables over, to develop a link between Dublin and Belfast.

Mr McSweeney admitted the company would need landowners' permission to put the telecommunications cables on the existing overhead electricity cables. He said the company would shortly begin talks with the IFA on the matter.

It is understood that the ESB has long-established procedures for such negotiations, especially with the IFA. However, Mr McSweeney admitted that in some cases individual deals would have to be negotiated. These would involve some form of payment to landowners. Mr McGrath defended the length of time the venture took to put together. He said both parties had needed to be assured that there was something in it for them. "We started talking in April and nine months is a very short time for a joint venture," he said.

The new chief executive will be appointed by BT and the ESB will choose the financial director. The two companies will be equally represented on the board.

Last night, a spokesman for Telecom said clearly the competitive challenge is intensifying, but it's a development the company had clearly planned for. "We will continue our successful formula of providing a total solutions approach to our customers, complemented by ongoing price cuts."