LESS than 1 per cent of residential phone users have terminated their contracts with Telecom Eireann and switched to another operator since de-regulation was introduced in December, according to a new survey from the research group, Amarach.

All of the 0.7 per cent who left Telecom Eireann went to Esat Clear, with the third operator in the market, Ocean, a joint venture between British Telecom and ESB, picking up no residential customers, the survey found.

The survey was conducted in late January/early February and more than 1,000 people throughout the State were questioned.

When asked had they considered switching their residential phone provider in the last three months, only 7 per cent said yes.

Amarach said there was a low number of people switching "despite the fact that most of those surveyed certainly qualified for Esat's offering as their average phone bill is £113 a month".

However, it added that there was significant potential for competitors as almost half of Telecom's customers said they feel "Telecom does not understand their needs".

The survey points out that those who have considered switching are among Telecom Eireann's most valuable customers - "they have higher incomes, are better educated and make greater use of technology". The survey also showed that operators intending to enter the market in the future may find it hard to establish their brand. There was almost no recognition among those surveyed of companies like Cable & Wireless, Deutsche Telecom, France Telecom, AT&T, MCI WorldCom and Stentor.

"Only Esat Clear has made a significant impression as a credible alternative telecoms supplier to Telecom Eireann. Even so, most people would choose to stay with Telecom in the first instance if offered the right package," the survey said.

When asked why they would not switch their operator, some 67 per cent said they were happy with the existing service. Another 16 per cent said they wanted to wait and see what happened in the market, while 13 per cent said they wanted to support the existing provider.

Lower prices remain the key to subscribers loyalty according to the survey. An all round cost reduction of 10 per cent would be sufficient to make nearly half of all users switch.

Details of this survey and others by Amarach, which looks at future trends, are available at the company's website www.amarach.com.