Eircom will introduce a type of digital cordless phone shortly that will enable consumers and businesses to send text messages from home or office. The group said yesterday it would spend €20 million over the next three years upgrading its network and telecoms equipment to carry text messaging services.

The technology can also be adapted to enable businesses to use the handsets to make free internal calls as if using a walky-talky and to transfer incoming calls from one handset to another.

The introduction reflects an acknowledgement from Eircom that it faces significant competition from mobile phone operators for custom.

It also reflects the growing popularity of text messaging. Eircom was one of more than 45 firms to apply for short messaging codes this year through which it will offer value-added services such as dating or goal alerts to mobile phone users.

Customers who buy the Eircom 4012 or 4012 Micro will be able to send text messages from September.

The handsets will cost €169.95 and €219.95 including VAT, have a 300m range and can store up to 200 names and addresses. They also have an inbuilt speaker-phone facility.

The Eircom 4012 range of handsets has been developed with the German electronics firm Siemens.

Mr Cathal Magee, managing director Eircom Retail, said customers were enthusiastic about the product.