The European Commission is investigating Telecom Eireann's prices for connecting international calls. Telecom is one of seven telecommunications companies under scrutiny.

The investigation, first begun in October 1997, involves what is known as "accounting rates" the charges for completing international phone calls that are agreed between telecommunications operators in the countries where the calls begin and end.

"Accounting rates have an important influence on the prices users pay for international phone calls," the European Union executive said in a statement.

A spokesman for Telecom maintained that its rates to end users were exceptionally competitive in Europe. He said Ireland-Britain represented 80 per cent of its EU traffic and its rate was about 1p cheaper than British Telecom's to Ireland. "Equally, our rates to other EU countries are cheaper in most cases than their rates to us."