The Government's plan to make the Republic an e-commerce hub is in serious trouble because of its telecoms liberalisation policy, a pressure group said yesterday.

ALTO, an industry group representing the telecoms sector, said an EU report published this week had further highlighted a number of issues reducing competition. ALTO chairman, Mr Iarla Flynn, said this report mentioned the Republic as one country where incumbents had continued a practice of continually appealing against regulator decisions.

Meanwhile, a legal challenge by Eircom against a decision by the telecoms regulator over the price it charges other operators to access its local network was mentioned in the High Court yesterday. The court case, which will probably stretch well into next year, is up for mention again in early December. Esat has applied to formally join the case with the regulator against Eircom.

The European Commission said it may take legal action against incumbent operators, such as Eircom, in EU countries where competition had been stifled.