Fewer than 400 people have signed up for a vulnerable user scheme set up by Eircom as part of a deal with ComReg that has enabled the firm to raise line rental fees three times in one year.

Despite the low take-up of the cut-price scheme by the public, Eircom used the existence of the scheme yesterday to help justify an 8 per cent rise in telephone line rental to €24.18 a month.

This price increase will be implemented on February 4th, following confirmation yesterday by ComReg that it complied with its regulations.

Responding to criticism about its decision to increase line rental, Eircom said its charges had fallen by 40 per cent in real terms over five years. It also said Irish business and residential customers' bills in the Republic were below the EU average.

Mr Noel O'Flynn, chairman of the Oireachtas Communications Committee, said last night he would call Eircom and ComReg before the committee to explain the latest increase to consumers.

Labour's communications spokesman, Mr Tommy Broughan, accused Eircom of exploiting its monopoly by increasing line rental.

The Consumers Association described the price increase as unacceptable and unaffordable.

Rival firm Esat BT criticised the price rise as "astonishing".

"This represents a hike of 25 per cent for consumers and a 55 per cent increase since deregulation five years ago... Like a stealth tax, Eircom are creaming off huge revenues on a regular basis from the one remaining area that is not yet open to competition," it said.

Rival telecoms operators are not able to provide line rental to consumers. The firms blame Eircom for delaying the introduction of a wholesale line rental product for up to a year.

Meanwhile, Eircom insisted that its low user scheme, which is called a vulnerable user scheme by ComReg, could ensure that customers who do not often use their telephones did not pay higher bills as a result of increasing line rental prices.

This scheme enables people to pay a subscription fee of €22.50 for line rental and calls worth up to €5. If they use more than €5 worth of calls, they are charged double the standard Eircom rate for calls up to €11.

The scheme is tailored to suit occasional users of telecoms services and was insisted upon by ComReg as part of a deal to remove a cap on Eircom's prices for low users of services.

However, there seems to be very little consumer knowledge about the scheme, which has attracted fewer than 400 users.

Mr David McRedmond, Eircom's commercial director, admitted it was possible that people did not know about the service. He said the service was advertised on Eircom's website but promotion of the scheme was being delayed until Eircom could introduce new bundled services.

These services are being delayed by the regulator until a viable wholesale line rental product is launched.

Meanwhile, Eircom announced a series of other price increases yesterday on a range of other products from telephone rental to its social benefit scheme which provides pensioners and welfare recipients with a publicly funded service.

Under this scheme, the Department of Social Community and Family Affairs paid Eircom €84.1 million in the nine months to the end of September 2003.

Eircom will now increase its charge for this service to €21.85 ex-VAT in February, compared with a previous charge of €20.41, ex-VAT.