Eircom has been granted a two-month extension to its current broadband promotion following a deal signed yesterday with the the Commission for Communications Regulation (ComReg).

The deal means Eircom will continue to offer its promotional discount worth €298.65 on digital subscriber line (DSL) services provided to new customers until the end of February.

It may also boost momentum in the broadband market by enabling rival firms to offer high-speed internet to people at lower cost than currently possible. Currently, rivals such as Esat BT have to pay Eircom a connection fee worth €20 to use its network to connect broadband customers.

ComReg had threatened to block Eircom's promotion this week because it would not lower the fees it charges rival firms to access its own network.

This followed criticism by Esat BT last week that it could not make money from broadband due to the excessive wholesale costs it had to pay to Eircom.

However, Eircom confirmed yesterday it had agreed to drop the current €20 wholesale connection fee that it charges rivals to provide broadband to customers. For rivals this gives them more room to manoeuvre when pitching their own broadband offers.

Eircom will continue to receive €27 per month wholesale line rental fees from rivals that use the firm's network to provide high speed internet services.

Mr David McRedmond, Eircom's commercial director, said the company was eliminating the €20 wholesale connection fee for the next few months. He also challenged other telecoms operators to take advantage of the offer.

Uptake of broadband among Irish consumers, which remains very low compared to other European Union states, has started to pick up in the Republic as a result of cut-price promotional offers.

Eircom's current promotion offers customers free connection fee, free modem and free first month's line rental. Some 10,000 customers have signed up for the offer, which amounts to a saving of almost €300 for consumers.