ESAT Digifone is to offer its mobile phone customers a 25 pence flat rate roaming charge when they make or receive calls in Britain and Northern Ireland.

The charge will be introduced on October 25th for Digifone customers who roam on the BT Cellnet network while in the UK and who are signed up to its World Plus tariff option.

The rate represents a 73 per cent cut in Digifone's charge for a mobile call made from the UK to the Republic. It will also mean considerable savings of between 22 and 44 per cent for calls made to UK numbers and calls received while in the country. Digifone customers using their phones in the UK will also be able to use their codes to access their message minder and to connect directly to Digifone customer care.

The deal, which has been struck with sister company BT Cellnet, is one of the first such cheap rate roaming arrangements in the world.

Mr Barry Maloney, chief executive of Esat Digifone, said the company had been working to introduce the special roaming tariffs since British Telecommunications acquired Esat earlier this year.

The deal is likely to put considerable pressure on Eircell, which offers its customers a best rate of 98 pence for calls made in the UK to the Republic.

"The potential consequences for Eircell are very serious if they can't get some sort of regulatory relief to receive similar rates," said Mr Scott Rankin, an analyst with Davy Stockbrokers.

"It explains why it is keen to get a mobile partner in Vodaphone to enable it to offer similar rates." An Eircell spokeswoman said the company was in talks with several UK operators regarding roaming tariffs and an announcement was "in the pipeline".

The new tariff structure will be attractive to customers who spend a lot of time in the UK. It is also likely to prove popular for people who live near the Border with Northern Ireland.