Esat Telecom will invest £20 million (€25.4 million) in an Internet exchange centre at the Citywest campus in west Dublin which will be fully operational by the end of the year.

In addition, the company's parent group, BT, will rebrand the business with the Internet service provider, Ocean, in the next two weeks.

Esat has secured five contracts worth £1.5 million, which currently use 30 per cent of capacity at the Esat-X centre, said Mr Richard Cooke, chief executive at its corporate and broadband services division.

This would generate a "significant return" in the next year, he added.

The Esat-X centre - which will employ 20 people - is one of eight opened in Europe by Ignite, a division of BT which plans 12 more in nine states in the region.

Ignite's president and chief executive, Mr Alfred Mockett, said the company would target US groups mainly and European groups, describing the Esat-X service as "plug in" facility to its broadband network.

Existing customers include Ryanair.com, the budget airline's Internet booking service, a US e-commerce infrastructure firm, qpass.com, "and other US multinationals", said Mr Mockett. He declined to reveal who these groups were.

The integration of Ocean into Esat was 90 per cent complete, Mr Mockett said. This follows BT's £1.9 billion takeover of Esat last January, which was completed in June. BT bought out its 50 per cent joint venture partners in Ocean - the ESB and US insurance group AIG - in a deal valuing the Internet company at £355 million shortly after its acquisition of Esat.

"We feel there is tremendous value with the local look and feel," said Mr Mockett of the rebranding. "BT is providing additional services. It's a `BT-inside' approach."

Esat-X functions as a hub by providing web-hosting and application service provision to markets in Europe without having a presence there.