ESAT Telecom's mobile phone division, Digifone, plans to invest some £50 million (€63.49 million) this year in a portal site which can be accessed by mobile phone and PC users.

The initiative includes a £32 million deal with Nortel Networks to supply a network for the new system.

The company's chief executive, Mr Barry Maloney, said he hoped that between 150,000 and 200,000 of its 700,000 mobile phone customers would be using the portal service, to be known as Digifone-On-Line or DOL, by the end of the year. Digifone-On-Line will also function as an Internet Service Provider, providing Web access to PC users.

The arrangement with Nortel involves the supply of the State's first general packet radio service (GPRS) network. When installed from early next year, this system will cut the download speed of a typical e-mail message to a mobile phone from 8 seconds to 0.7 seconds, Mr Maloney said.

He described the GPRS system as a precursor to the universal mobile telecommunications services (UMTS) system, the third generation of mobile infrastructure which is expected to be operational in 2003. Digifone is hoping to secure a UMTS licence when they become available.

From July 6th, the system will allow "seamless" access from personal computers, GSM mobile phones, the most common, and Wireless Application Protocol (WAP) mobiles, which allow Internet access to customers. DOL will offer e-mail, news and online shopping facilities. Allied Irish Bank customers can access account details on the system - Mr Maloney said Digifone hoped to reach agreements with other banks.

While DOL is not confined to WAP users, Mr Maloney said Digifone was keen to increase usage of the WAP system. Less than 10,000 units are in use in the Irish market, although Digifone has launched a range of telephones at promotional prices.

Digifone will charge pre-paid customers 20p per minute, before VAT, to the use system on their mobile phones.