A senior official with telecommunications regulator, ComReg, told an Oireachtas committee that international research suggested telecoms players obliged to install phones in remote regions enjoy a competitive advantage.

Eircom recently claimed such obligations erode its competitiveness.

Studies in Britain and Scandinavia indicate operators charged with providing universal services have a higher profile and greater brand recognition than rivals. This has been shown to outweigh the cost of connecting far flung regions to networks, ComReg commissioner Ms Isolde Goggin said.

Her comments come after Eircom last month described its universal service obligation (USO) as a "significant burden" which diminished its competitiveness.

Research showed that connecting rural communities increased the numbers making calls on a company's network and boosted its capacity to generate profits, Ms Goggin told the Oireacthas Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs.

ComReg was outlining how the provision of telephone services is guaranteed throughout the State. The agency is reviewing the entire regulatory regime and is due to issue a decision notice shortly.

Ms Goggin stressed it has not yet decided how the USO will be shared out in the future and raised the possibility of a number of operators offering different elements of the service, which includes installing phones, providing directory inquiries and publishing and distributing telephone directories.

ComReg stopped short of expressing an opinion on a proposal by Eircom that a limit be placed on the amount it can be forced to spend connecting householders in remote areas but insisted any future USP will be required to hold firm to the obligation to provide telephone access to rural regions.

"The obligation to supply a telephone line and other universal services will continue in the future, irrespective of who is designated as the provider," ComReg commissioner Mr John Doherty said.

The committee expressed concern that Eircom may be tempted to withdraw public phones from rural areas as mobile phone ownership approaches saturation levels.

Members pointed out that mobile coverage is frequently patchy outside urban areas and that tourists in particular rely on public phones.