A new company using the Ryanair brand name claims it can offer customers telephone calls at half the price charged by Eircom.

Ryanair Telecom, which has a licence agreement with the airline to use its name, said it could offer the rates because it was keeping overheads low and making significant use of the internet. The company promises the rates will apply for local, national and international calls.

The company claims a residential or business customer will be able to make savings of €1.25 on a 30-minute national call and up to €2.16 on a 30-minute call to a mobile.

"While Eircom charges up to five cent a minute for local calls, the same calls with Ryanair Telecom can be made for as little as 2.5 cent a minute," claimed chief executive Mr Sean McVeigh.

Customers must go to Ryanair Telecom's website, www.ryanairtelecom.com to register for the service. Once they submit their Eircom account number and bank or credit card details Ryanair Telecom makes the necessary changes. After that the customer simply dials as normal.

Mr McVeigh said: "Irish consumers have been penalised for so long due to lack of real competition. We intend to shake up the market and provide people with savings on their phone costs where it matters - in their pockets. We have stripped out all the overheads without compromising on call quality so that we can provide stiff competition in the Irish market."

Ryanair Telecom is an Irish owned private company operating under licence from Ryanair plc. Neither Ryanair plc nor its directors have an ownership interest in Ryanair Telecom, said a statement.

Mr McVeigh said a company called Bumblebee Communications Ltd was behind Ryanair Telecom. He said this company was owned by a group of investors who he declined to name. He said the idea came about after talks with Ryanair chief executive Mr Michael O'Leary.

Meanwhile an Eircom spokesman said Ryanair Telecom's offering was only possible because of Eircom's cheap wholesale prices.