TELECOMS provider The Phone Co-op is celebrating the arrival of 8,300 new customers after signing a deal with over-50s specialist Saga.

The Phone Co-op, based in Chipping Norton, has taken on several new staff to cope with the influx after buying Saga's telephone business for an undisclosed amount.

Chief executive Vivien Woodell said: "We are delighted. I think it's an excellent partnership. Saga is a well-known and respected business and we want to welcome their customers.

"Obviously we are going to encourage them to become members and be part of our ownership structure."

The Phone Co-op was set up 12 years ago to allow charities and non-profit making enterprises to bulk-buy telephone services. Since then it has expanded into providing phone and Internet connections to residential and business customers. It is owned and controlled by its members.

Mr Woodell said: "We have recruited a few extra staff to deal with the new customer-service work. At the moment, customers only buy their calls from Saga, not phone rental or Internet services.

"One of our key jobs is to sell the extra services to those 8,300 people, and once that happens we will be needing more staff."

As part of the deal, Saga will also recommend the Phone Co-op to the two million users of its other services, such as insurance, holidays and savings products.

Mr Woodell added: "They felt that we share their values and customer service, and we both feel that this is a good fit."

The deal involves both an upfront payment from the Phone Co-op's cash reserves and a revenue-sharing element, he said.

The co-operative employs about 40 people at its Chipping Norton head office, another eight in Manchester, where in 2003 it acquired Internet company Poptel. Anothe two staff work in County Durham, where earlier this year it acquired business-to-business re-seller Avoco.

It has more than 15,000 customers, including Midcounties Co-op, Christian Aid, Amnesty International, Triodos Bank, the Centre for Alternative Technology, Manchester City Council and Unison.

Any profits which are not re-invested are given back to members in the form of a dividend and through a loan fund which supports other co-operatives. See www.thephone.coop.