Fixed-line operator Eircom has finalised a €3 million communications deal with State public transport group CIÉ.

Eircom bid for the contract to supply voice and data communication services to CIÉ when the company published a public tender last year.

The contract is valued at €3 million and will run for three years, according to the tender documents.

An Eircom spokesman said the two parties worked out the final details of the contract in recent weeks, and have signed off on it.

The public transport company officially awarded the contract in December and the two parties then entered talks on finalising the deal. There were three other bids.

Eircom has a large number of State communications contracts, many of them with Government departments and agencies.

However, it is set to face increasing competition in this sector as operators like BT Ireland have plans to target the State's business, which is lucrative and guaranteed.

CIÉ is the parent of the State's three public transport companies: rail operator Iarnród Éireann; Bus Éireann, which provides bus services around the Republic; and Dublin Bus, which provides bus services within the capital.

Eircom is heading into its last week as a company quoted on the Irish Stock Exchange.

Late last month, shareholders approved its €2.36 billion sale to a partnership of Australian venture capitalists Babcock & Brown and its employee share ownership trust (Esot), which holds shares on behalf of its workers.

The company is due to be delisted from the market and taken private late next week as the final stages of the sale are completed.

As well as being the Republic's dominant fixed-line operator, Eircom also owns mobile network Meteor, which is the third largest in the State with about 700,000 subscribers.