EIRCOM AND the communications regulator have come to an out-of-court settlement which means the telecoms company will be restricted in its ability to bundle together different products for special offers.

Earlier this year Eircom challenged a ComReg decision that four Eircom Talktime Family and Broadband bundles were being sold too cheaply, giving it an unfair advantage over its competitors.

The bundles, which cost €45 to €60 a month, included unlimited calls from Eircom landlines to mobile phones on the network of its mobile wing, Meteor. ComReg’s investigation is understood to have been prompted by complaints from other mobile operators who were losing customers to Eircom as a result of the offer.

The settlement published yesterday means a “net revenue test” will be applied to any Eircom bundles that include the cost of line rental. The test ensures Eircom is not selling below cost. Any existing products on the market will have to pass the test or face being modified or taken off the market.

In a further blow for the indebted telecoms firm, which is being taken over by STT, a division of Singapore’s sovereign wealth fund, ComReg found yesterday that it was failing to meet its universal service obligations. Because of its dominance of the market, Eircom has to meet legally binding targets for providing new connections, the occurrence of faults, and how quickly they are fixed.

While it failed to meet the targets for the year to the end of June last, an Eircom spokesman noted the “indicators are we are making progress”. He said Eircom was investing €100 million over the next three years to improve network service.

In a forward to the report, ComReg chairman John Doherty noted the regulator had powers under European law to force Eircom to meet its universal service obligations.