Price caps on telecoms services should be removed by the Government to encourage companies to invest in telecoms infrastructure and services in Ireland, according to a new report from IBEC. Investment in Telecoms in Ireland - An Ongoing Imperative, published yesterday by IBEC's Telecommunications and Internet Federation (TIF), recommends allowing operators to set prices that will generate sufficient return to justify ongoing investment.

"The price cap on telecoms is increasingly being seen as a cap on the industry," said Dr George Young, chief executive of Commergy and chairman of the federation. It represented a "blunt instrument" that was distorting investment issues for operators.

"The focus must move towards incentivisation and competition rather than price controls," he said.

Mr Pat Galvin, director of regulatory affairs at Eircom, said removing the price cap would have an important effect on the level of infrastructure investment.

However, when asked if a removal of price caps might result in customers having to pay higher prices, Mr Galvin said it would be "unwise to assume that prices would go up", as the telecoms market was much more competitive today.

The report also calls for the setting up of a broadband task force to look at new ways of promoting more widespread broadband access and usage, comprising telecom operators, content providers, broadcasters, Government representatives and others.