ITG Group is poised to become the sole challenger to Telecom Eireann in the payphones market. At an extraordinary general meeting yesterday, it announced it had signed non-binding heads of agreement to buy out the only remaining competitor in the market, the Telephone Company of Ireland (TCI).

ITG also announced yesterday that it had made a further British acquisition, taking over Integrated Cash Register Products (ICRP), a credit card services partnership, for a total of £1.8 million sterling.

Shareholders yesterday approved the acquisition of the British payphone company, Telecentral, which has a 20 per cent stake in TCI, and a placing and open offer to raise £15.4 million sterling. The acquisition of Telecentral for up to £10 million was announced on June 30th. "ITG provides point of sale systems to Bank of Ireland and always intended to develop this business outside of Ireland. . . As with the recent acquisition of Telecentral and the payphone division of Trexco, this acquisition [of ICRP] is a natural extension of the group's business," Mr Paschal Taggart, ITG chairman, said. He told the meeting that the heads of agreement to purchase the remaining 80 per cent of TCI's share capital had been signed on Wednesday. According to one source close to the deal, the cost of the 80 per cent buyout would amount to about £3.5 million.

As Telecom Eireann's only competitor in the payphone market, ITG would have almost a quarter of the market, Mr Taggart said after the meeting.

TCI, a Galway-based company, operates about 500 sites, including a contract with Aer Rianta. ITG Group will operate about 1,500 payphones if the deal goes through.

"They [TCI] were using the kit from Telecentral which is a very, very top-class kit," Mr Taggart said. The outstanding 80 per cent of TCI is owned by the Maye family. Its general manager is Mr Michael Maye, of Ballyfoyle, Co Galway.

Trexco, which has about 500 payphones established in hospitals, bars and shopping centres, was acquired last month in a deal worth £1.6 million. ITG, which was the first company to list on Dublin's Developing Companies Market, in May 1997, last month announced a 34 per cent rise in pre-tax profits to £670,000 in the year to April 30th, 1998.

Asked by one shareholder about the security of ITG's street payphones, which number more than 50, Mr John Nagle, chief executive, said that if the phones were kept working, there was "little or no vandalism" at all. "From a robustness point of view and a security point of view, the phones are certainly very good," he said.

He added that the group would be switching over to "smartcard" technology in its payphones, saying that proprietary telecom cards were "a dead duck". About £1.5 million would be invested in the Irish market over the coming year.

After the meeting, Mr Nagle said that card payment systems could extend to the loyalty cards operated by supermarket multiples or an all-purpose card could be used for smaller purchases such as paying bus fares, parking meter charges and calls on "intelligent" payphones.

He added that the company was developing a traditional-looking telephone kiosk which would suit heritage towns around the State. "We are serious about building a presence around Ireland," he said.