Carphone Warehouse yesterday doubled the number of customers using its TalkTalk fixed-line services by spending up to £154 million on acquiring Onetel from energy utility Centrica.
The group, best known for its high street stores selling mobile phones, struck a deal with 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, Car-phone said it is also buying the fixed-line business of Tele2 in the UK and Ireland for £8.5 million. This will give it a further 224,000 customers.
Carphone said the twin deals would help to fulfil its goal of becoming the undisputed challenger to BT in the fixed-line market.
"Our goal is to become the number one alternative residential telecoms provider in the UK market," the group added.
"The acquisition of Onetel propels us clearly towards that position and gives us a substantial platform of profitable voice customers from which to launch our drive into the broadband market in 2006.
"It also allows two major competitors to join forces in their bid to deliver improved value and service to residential customers."
The commitment by Centrica to sign up more telecoms customers was a "fundamental part" of the d eal and accounted for £37.1 million of the acquisition price, the company said.
Carphone added: "We believe that this significantly enhances the value of the transaction for The Carphone Warehouse as it gives us access to a substantial new source of potential customers through a well-recognised and successful channel."
The breakdown of the Onetel deal sees £94.9 million being spent on the purchase of its residential and business operations and a further £22.2 million will be paid to Centrica if higher customer recruitment targets are met.
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.
Sir Roy Gardner, chief executive of Centrica, said: "Global energy markets are changing rapidly and we want to focus closely on growing our core energy and related services operations in the UK and internationally.
"We will continue offering telecoms services to our British Gas customers, but we don't need to own Onetel to do this."
Meanwhile, Centrica is to buy electricity produced from Airtricity's Braes of Doune wind farm in Scotland, renewable energy group Airtricity said in a statement.
The 72-megawatt project, located in Stirlingshire, is currently under construction and is scheduled to be operational during the autumn of 2006. It is capable of supplying 46,000 British Gas customers.
The transaction will contribute to meeting six per cent of Centrica's overall renewable target for 2007/8, Airtricity said. ..SUPL: