Accounts just filed by the company for its operations in the Republic in the year to March 2005 show that the telecoms firm now has accumulated losses of 883m. The operating loss for 2005 was 26m, but another 26.7m in interest repayments further dented the bottom line. The operating loss in 2004 was 35.7m, while the pre-tax loss was just over 59m, including 23.7m in interest.

The company, which offers residential and business telephone, data and internet services, said it had "improved its performance from the previous year despite difficult trading conditions during the year. . . with stiff competition from the incumbent and other operators".

Formerly known as Esat BT, the company rebranded as BT Ireland last year.

British Telecom acquired Esat, which was founded by entrepreneur Denis O'Brien, in 2000 for 317m.

The accounts also show that BT Ireland has agreed to pay CIE 1.3m following a claim made by the state transport firm against it. In 2002, CIE sought the payment of a "performance fee" under the terms of a contract drawn up between the two companies in 1998 which provided Esat with access to CIE property to install a fibreoptic network on its rail lines.

A spokesman for CIE said BT Ireland pays a flat fee to the transport firm every year and an annual performance bonus. He said the settlement was the result of the "clarification" of the terms of the contract. BT Ireland has also agreed to pay CIE bonus amounts relating to 2001 and 2002, but did not disclose the settlement in the accounts.

Apart from providing services to major corporate clients such as Bank of Ireland and AIB, the company has been aggressively promoting its broadband internet service. Last year BT Ireland's now chief executive, Mike Maloney, said the company was experiencing "good growth" in broadband customers and by May last year had 35,000 subscribers.

Maloney replaced Bill Murphy as chief executive of the Irish business last year. Last month BT Ireland launched a fresh assault on the broadband market, boosting connection speeds for existing customers and offering a newly-priced service in an effort to attract new subscribers.