Cable & Wireless yesterday beefed up its services to online retailers in a plan to become one of Europe's biggest providers of data business services. It announced a joint venture with e-commerce group Reality, the logistics, e-commerce and customer management service business of Great Universal Stores.

Reality would bring to the agreement its distribution, customer management services and credit verification resources while C&W would provide web hosting and software support.

The market for services to online retailers is estimated to be worth $10bn within five years. Mike McTighe, C&W chief executive of global operations, said the venture was expected to be operating later this year. Netherlands-based e-tailer hot-orange.com is trialling the service.

Last month, C&W bought five internet-related businesses in Europe for $100m that will provide services including web hosting, design, network integration and e-commerce. The deal made C&W the third biggest internet services company on the continent.

C&W has splashed out more than £650m in almost two years to transform itself from a traditional telecoms operator deriving most of its revenue from voice traffic, into an organisation centred on data and internet protocol services.

The deal is also good news for GUS because the retailer's earnings have suffered in the competitive British market.