Many telecoms companies have experienced tough times

Newark-based Project Telecom, which is the UK's largest independent service provider for business communications, is recommending the takeover.

The deal, which already has the backing of the majority of shareholders, is worth £155m.

It offers investors in Project Telecom 70p per share.

Difficult trading

The news sent shares in the firm up by 5%, and Vodafone's rose by a penny.

Project Telecom admitted in April that growth was slower than expected after being hit by intense price competition, as well as feeling the effects of a Competition Commission ruling on charges.

The difficulties led to a strategic review of the business which prompted the board to consider talks on a potential takeover.

A spokesman said today that the offer represented fair value for shareholders.

Staff are being told about the proposal in a series of meetings.

The announcement has come as Vodafone revealed it is cutting about 100 jobs in a restructuring of its regional operations.