Faulty software installed by Ericsson into Eircom telephone exchanges last June was responsible for last Friday's blackout of 70,000 telephone lines in Dublin, according to Eircom.

Addressing the Oireachtas Joint Committee on Public Enterprise and Transport, ail Committee on Public Enterprise, Mr Gerry O'Sullivan, Eircom's director of group corporate relations, said the "time bomb" had been installed in all Eircom exchanges and was also used by telecom operators in a number of other European countries.

Mr O'Sullivan said that Ericsson had since intervened and modified the way data were released into networks. It had assured Eircom that its procedures for testing software were being modified to ensure the problem would not recur.

In a letter to Eircom, Mr Ian Cahill, managing director of Ericsson Ireland, said: "We fully accept that the primary failure of Eircom's fixed telephone network in Priory Park and Merrion exchanges was caused by Ericsson."

Mr Cahill went on to explain in the letter that the new software upgrade, which was faulty, was installed into both exchanges. When a problem arose with calls from freephone numbers building up, Ericsson technicians were called in and removed the faulty software.

The technicians then ordered a restart of the system at 2.30 p.m. on Friday, but this also used the faulty software and resulted in the system crashing and knocked out landlines.

The Merrion exchange, which also had the faulty software, crashed after a restart was ordered when an abnormally high number of call terminations were building up.

Ericsson said that subsequent investigation in the case of the Priory exchange showed no account was taken during the testing process for the software that it would have to deal with a a type of freephone system which is unique to the Irish market.

In the Merrion case, Ericsson said the problem was related to a halted timer, in connection with calls on call-waiting building up. Pending further investigation, the call-waiting function has been removed from the exchange.

Mr O'Sullivan told the committee that it was quite extraordinary that the Eircell mobile system had crashed at the same time and that Eircom apologised and fully recognised the scale of the disruption caused to businesses and consumers.

Mr O'Sullivan said that it was a purely physical problem in the Eircell mobile system, with a burst pipe from the air conditioning system flooding the station which shorted fuses and resulted in a small fire.

The committee was told Eircom believed that the issue of compensation to users did not arise in this situation, in line with industry norms. Mr O'Sullivan said the company would not be seeking compensation from Ericsson.

Mr O'Sullivan stressed that the problems had nothing to do with Y2K and he said that he was fully confident of the company's readiness for Y2K. He told the committee that if any Y2K problems did arise it would affect Eircom billing and not telephone or mobile services.