ComReg, the telecoms regulator, has initiated a public consultation process on a formal request by Eircom for the creation of an industry fund to provide "uneconomic" telecoms services in "uneconomic" areas.

Eircom welcomed the development but pointed out that it first sought such a fund five years ago. The firm is understood to have made its most recent request in mid-2006.

The fund would be financed by all telecom firms in the sector, with contributions made proportionally according to market share.

Such a development would increase the cost base of Eircom's rivals, so they are considered likely to oppose it.

Similar funds have been established in Italy and the Czech Republic. An Irish fund would help defray the cost to Eircom of meeting its requirements as the company designated to provide basic phone services throughout the State. The sum of money in question has not been determined but the application was made in respect of the cost of providing services to parts of the western seaboard area and certain urban areas.