The jobs, most of which are in customer support and sales operations, come before the planned launch of Ionica's service in Birmingham, due within weeks. Coverage has already been extended from East Anglia, where Ionica began its service last summer, across the East Midlands. The company aims to cover most of the UK, except Scotland, by 2002.
The new jobs, based in offices in the centre of Birmingham, will all be the equivalent of full-time posts, though the company said numbers employed may go beyond 600 if applicants wanted to join part-time.
The expansion will intensify pressure on British Telecom, the principal target of Ionica's assault on the domestic market. It uses radio signals to relay phone lines from the home to nearby base stations, bypassing BT's near-monopoly of local exchange lines. Earlier this week BT announced plans to create a further 2,000 telephone marketing jobs as the competitive threat from rival operators has reached what many industry experts believe is critical mass.
Nigel Playford, chief executive, said: "We are only targeting BT customers. We are not marketing ourselves against the cable companies. The existence of cable has enabled us to create our own strategy which is hugely different."
Ionica offers a 15 per cent cut in call charges over BT and 20 per cent lower line rental bills. Other innovations include providing three separate numbers for every line, each with different ringing tones, to help family members to identify the destination of incoming calls.
Mr Playford claimed Ionica was connecting customers at the rate of 3,000 a month in the East Midlands, faster than the local cable company. So far more than 15,000 homes in East Anglia have switched to Ionica, mostly from BT, out of a potential 700,000 which can take the service.
The company says it is on course to float on the stock market this year.