Consumers and businesses will be able to sign up for a range of new telephone services from Eircom that will yield savings from bundling line rental and telephone calls together for a flat monthly fee. The new services start on June 1st.

The firm published details of its new "Talktime" packages yesterday and claimed they could save up to 35 per cent on people's average monthly telephone bills.

Eircom will spend €2 million marketing the service and aims to have 300,000 customers using Talktime by the end of 2004.

However, Alto - a lobby group representing Eircom's rivals - said the company should not be allowed to launch its bundled products until rivals can offer line rental services to consumers.

Mr Iarla Flynn, chairman of Alto, said the bundled packages could also make phone pricing less transparent for consumers.

Eircom is offering four separate packages for residential consumers, which bundle line rental, free off peak calls and cheaper peak rate call rates to consumers.

The cheapest flat rate package is one for €29.99 including VAT which offers line rental, 300 off peak calls, 120 free calls to a single nominated number to consumers. Peak rate national calls are added to the flat rate fee at a price of 4.8 cents per minute, slightly below the current rate of 4.9 cents per minute. Call answering is included for free.

Eircom said there would be no penalty charges for consumers that exceeded their agreed allowances in any of the schemes. People will also be allowed to carry over any unused minutes onto their next monthly bill.

An Eircom spokeswoman said the firm's existing Options discounts packages will continue to be offered to customers. But she advised consumers to contact customer service to see which new service may be appropriate.

Eircom is also offering six telephone packages for small and medium sized businesses, with flat rate fees ranging from €24.99 to €121.49 per month excluding VAT charges.

The Commission for Communications Regulation (ComReg) said it was reviewing Eircom's package. But Eircom said it had now received ComReg approval.

Up until now ComReg has refused to allow Eircom to bundle line rental and call services into single packages because rivals could not offer line rental.

But earlier this month Eircom agreed to let rivals offer line rental services. Several firms are testing line rental and will launch services within the next few months.