The distribution deal, due to be announced later this week, will see 3's handsets sold in the video chain's 154 shops in the Republic. Xtravision already distributes phones for Meteor and has been expanding its range of consumer electronics to add to its core DVD rental business.

For 3 the deal will add much needed high-street presence. It has similar deals with electronics retailer 3G, Carphone Warehouse and several independent retail chains but is anxious to broaden its reach ahead of the Christmas shopping period, traditionally the busiest period for mobile phone sales. It is understood that 3 will open up to 10 shops over the next four months including a store on Dublin's Grafton Street.

Since its launch in Ireland last year 3, owned by Hong-Kong conglomerate Hutchison Whampoa, has refused to disclose its customer numbers or market share to either the media or the communications regulator Comreg.

Industry sources suggest the network has around 20,000 subscribers, which it will need to substantially increase if it is to justify its 300m-plus outlay to date on acquiring its 3G mobile licence and building up its network.