Residential and business fixed-line telecommunications company, Smart Telecom, has signed a €2.5 million contract with Data Electronics.

Under the deal, Data Electronics will host Smart's voice and data systems at its data centre in Kilcarbery Park, Dublin.

Smart said yesterday that the move would allow it to grow its own infrastructure and capacity at half the cost of developing an in-house centre. Data Electronics chief executive, Maurice Mortell, said the company was pleased to add Smart to its list of customers.

"The contract is a significant win for us and reinforces our position as a leading provider of services to the telecommunications industry," he said.

Data Electronics is the longest established provider of outsourced telecommunications and information technology services in the State.

Smart is the country's third largest telecoms player, with 330 workers. The company recently launched a broadband service and also operates 3,000 payphones.

The company was in the news last week when a partnership that included it, Virgin Mobile and a group of private investors pulled out of the auction to buy Meteor, the Republic's smallest mobile operator. However, the group said it would continue to look for commercial opportunities here.