Eircom removed almost 400 payphones last year, despite the introduction of new regulations designed to prevent the telecoms firm from getting rid of any more public payphones in rural areas.

It has also told prospective investors in the company that it is focused on reducing costs further in this area of its business, despite its regulatory obligation to provide call boxes in the State.

The company has a network of just 6,300 payphones, compared to the 7,796 call boxes that it had in March 2001 when it introduced a three-year rationalisation of its payphones division.

Eircom's flotation prospectus shows it removed 385 payphones in 2003, although the firm said yesterday that most of these were in-building phones.

An Eircom spokeswoman said that, over 18 months, the company has removed 320 contracted payphones from buildings and just 65 outside call boxes. All the call boxes were at sites with more than one phone and were removed in accordance with the Commission for Communications Regulation's (ComReg) guidelines, she said.

Since the advent of the mobile phone, fewer people now use payphones, making them less profitable for firms that operate them.

Eircom's payphone rationalisation programme has saved the company millions of euros in operating costs by reducing the number of staff required to maintain the boxes and collect coins.

But it has also proved controversial among rural communities, some of which have complained about plans to remove payphones in their areas.

Eircom is obliged to provide public payphones throughout the Republic under the terms of its universal service obligation, a key regulation that is mandated by ComReg.

A ComReg spokeswoman said the regulator constantly monitored Eircom's existing obligations in both single-site and double-site booths.

"We have not received any complaints or queries in over six months," she added.