It pays to scrutinise your bill and claim discounts, writes Jamie Smyth, Technology Reporter.

You may not notice it, but your telephone bill is set to rise by about €1.74 later this month as Eircom's third hike in line rental charges within 12 months takes effect.

From last Wednesday, Eircom's monthly line rental fee for residential users increased to €24.18, more than €10 above the European Union average for 2003.

Unsurprisingly, consumers expressed outrage at the move and many of Eircom's competitors jumped on the bandwagon, initiating huge advertising campaigns to attract new customers.

But behind all the catchy slogans and public venting of anger, is it really an "Eircom Rip-Off" as Esat BT adverts suggest?

Figures published by communications regulator ComReg (the Commission for Communications Regulation) at an Oireachtas committee last week show Irish residential consumers spend an average €44 per month on fixed phone services.

This ranks Irish consumers as the sixth highest spenders out of 17 developed states and the third highest spenders in Europe. But it does not necessarily mean Irish prices are high, as Eircom - in a similar way to the mobile firms Vodafone and O2 - can claim Irish people talk more.

Statistics comparing pricing are incredibly complex due to the range of discount schemes that are offered in EU states and the huge difference in weightings between calls and line rental.

But Eircom can justifiably say that it is one of the few utilities in the Republic that has managed to reduce average consumer bills in the past five years. The average residential phone bill has fallen to €47.99 per month excluding VAT in 2004, down from €50.30 in 1999, despite surging Irish inflation.

This is hardly surprising because it is the only utility fully open to competition and telecoms is also a sector where new technology has enabled almost every global firm to trim prices.

But perhaps the most startling fact in the Irish telecoms market is that hundreds of thousands of customers are paying much higher phone bills than they should.

The main causes of this are consumer lethargy and stealthy tactics used by Eircom.

Last week ComReg told an Oireachtas committee that up to 60,000 customers may be eligible for Eircom's vulnerable-user scheme, which was mandated last year. In fact, fewer than 400 people use the scheme because it was never properly advertised by the company.

This discount package is available to everyone who applies for it and costs €23.80 per month. It includes line rental, telephone rental, and local/national calls worth €5. If consumers exceed the €5 limit, they are charged double the standard rate for the next €5 of national/local calls.

ComReg made Eircom introduce the scheme in June 2003 as a condition for allowing it to increase its prices on a basket of services in line with inflation over three years. It is particularly tailored to help low users of telecoms services who are most adversely affected by rises in line rental charges. So for people who make very few calls - often older people or those who want their phone for emergencies - the scheme is an option.

Similarly, thousands of consumers are missing out on packages of discounts that could save them hundreds of euro on their annual phone bills.

Any customer who makes more than €12.80 of calls (including VAT) per month is eligible for Eircom's Options discounts - gold, silver or bronze. A two-minute call to customer care (telephone number 1901) inquiring about discounts will enable an Eircom representative to automatically put you on the right discount scheme, potentially saving huge sums per year.

The key to saving money on your phone bill is simple - take the time to examine:

your phone usage;

a variety of discount options from Eircom;

offers from rival operators.

But people are not yet making the most of competition as fewer than 200,000 people use a service provided by an Eircom rival.

Five years after the liberalisation of the telecoms market this is surprising, given that a comparison of the standard rates offered by Eircom are higher than most of the competitors in the sector.

The accompanying table shows consumers can clearly make significant savings by switching their call provider. Every firm profiled tends at least to match and usually beat Eircom's prices. This is particularly the case for consumers who make a lot of international phone calls, with savings of up to nine cents per minute available from Smart Telecom compared to Eircom rates.

Even an Eircom customer on its highest discount - the gold option - will pay more per minute on this type of call. So customers should look at their usage and the rates of competitors to select the best package.

Customers who make a lot of calls to Northern Ireland should consider Esat BT, which recently introduced an all-island service. But consumers should also be aware that its service does not suit "low users" because of a €25 minimum monthly spend condition.

But significant savings can also be made on local calls with Esat BT, Smart and Cinergi. For example, Esat BT users can save almost 13 cents on a 10-minute daytime call compared to the same call on Eircom's network.

So there is little excuse for consumers to complain bitterly about Eircom if they do not take the initiative to try out its rivals.

Rising wage rates and disposable incomes are generating lethargy among Irish consumers but there are also clear competition issues that undermine the attractiveness of Eircom's rivals.

Experts believe a major factor preventing people from switching operators is their inability to obtain line rental from any firm other than Eircom. Residential consumers must still pay their line rental bill to Eircom even if they switch to a competitor for call services. The hassle of not being able to get a single bill is generating inertia.

It is also small wonder that line rental - the only part of a phone bill not open to competition - has consistently increased in price since liberalisation. The Republic is one of only two member-states where line rental fees per month make up more of a consumer's bill than call costs.

Rivals' inability to offer line rental in the Irish market has also locked them out of certain sectors. For example, the 300,000 members of the Department of Social and Family Affairs "Social Benefit Scheme" have, until now, been locked into Eircom's service.

This month, for the first time, the cost of the scheme, which is set by Eircom, will rise above a direct grant to consumers from the Exchequer. It will now cost pensioners and welfare recipients €25.17 per month, compared to the grant worth some €24.69.

But the Department plans shortly to enable consumers to use the grant towards the cost of mobile phones, offering greater choice to people on the scheme.

In fact, there is a growing trend among young people to get rid of their fixed-line phones altogether and use only a mobile. For low users of telecoms services this could create major savings as they do not have to pay the €24.18 line rental on their fixed line.

But consumers should be aware that mobile phone calls generally cost a lot more than fixed-line telephone calls. International calls can be particularly expensive and people using pre- paid mobiles - which have no line rental charges - usually pay the highest per-minute fee for calls.

But perhaps the best news for consumers is that Eircom may be forced to offer rivals a wholesale line rental product by April.

This should overcome the "hassle factor" of having to pay two bills - one for line rental and one for calls - which is often cited by consumers as a key reason for not switching to a new operator.

It will also enable firms to offer a range of bundled packages offering broadband, line rental, internet and other call packages.

Esat BT is the first firm in the Irish market to offer a bundle of fixed-line call services to customers through its Advantage Plus service. This enables consumers to make as many national and local calls as they want - each for up toone hour - for a flat rate of €25 per month.

If wholesale line rental is introduced as planned in April it will be able to add line rental into these packages, a move that will offer more choice to consumers.

This move towards bundled packages will offer more choice to consumers, but it will also add further complexity when comparing tariffs. Fixed-line tariffs will gradually become as complicated as mobile packages.

For now, the advice is simple: consumers should take a look at their phone bills and ensure they are getting all the discounts they deserve. Otherwise, they are simply lining the pockets of the venture capitalists who own Eircom and, as they have proved up until now, it is often not in their best interest to let you know how to save money.