Carphone Warehouse today doubled the number of customers using its TalkTalk fixed-line services by spending up to €154 million sterling on acquiring Onetel.
The group - best known for its high street stores selling mobile phones - struck a deal with power supplier Centrica three months after Onetel was put up for sale.
Onetel will be rebranded TalkTalk and the deal also includes a three-year agreement under which Centrica has promised to recruit more telecoms customers through its British Gas business.
It brings together the 1.1 million landline customers of Onetel with the 1.06 million subscribers to TalkTalk, which was launched by Carphone two years ago.
In a separate statement, Carphone said it is also buying the fixed-line business of Tele2 in the UK and Ireland for £8.7 million. This will give it a further 223,000 customers.
Tele2 entered the Irish market in September 2004 but said the difficulty of offering broadband services led to the decision to sell off the business in Ireland and the UK.
Lars-Johan Jarnheimer, CEO and President of Tele2 commented, "The decision to divest our UK and Ireland operations has not been taken lightly and is a result of thorough analysis of the market and our various options.
"The way the market for alternative operators in the UK and in Ireland looks today, we can get significantly better returns by reallocating its budget to other markets."
Carphone said the twin deals would help to fulfil its goal of becoming the undisputed challenger to BT in Britain's fixed-line market. The commitment by Centrica to sign up more telecoms customers was a "fundamental part" of the deal and accounted for £37.1 million of the acquisition price, the company said.
In addition to its subscribers of its fixed-line services to UK homes, Onetel has 60,000 broadband customers, 40,000 mobile users and 50,000 business landline clients. A further quarter of a million have indirect access to telecoms services.
Revenues totalled £280 million last year and £162 million in the first half of 2005.
Carphone said it aimed to provide all of Onetel's residential customers with free on-network calls as quickly as possible.