Telecoms firm 3 Ireland has defended its running of the National Broadband Scheme after it was criticised in the latest Comptroller and Auditor General's annual report.

The report, which was published yesterday, said the State's average contribution per subscriber is expected to rise from €635 to €1,180 because of poor uptake.

The projected customer uptake of 126,000 subscribers by 2014 has been reduced to 68,000 customers as a result of a perceived lack of interest in the scheme.

However, 3 Ireland said the comptroller's estimate of 35,000 current subscribers is only partially correct because it does not include prepay and smartphone customers. The firm said that once these are added there are some 68,000 connections.

"The report highlights market analysis that says consumers have shifted towards prepay products because of the economic environment. The report does not take into the account these additional customers in National Broadband Scheme areas," it said in a statement.

"3 Ireland is confident that this run-rate will continue into 2014 and that the original customer numbers will be met if these connections are included, it added.

The company stressed that 51 per cent of customers in target areas were already served by other broadband providers prior to it securing the contract for the scheme. It said this had "significantly affected" the uptake of the scheme's services.

The comptroller's report also warned that there is a risk the projected socioeconomic benefits of the National Broadband Scheme will not be realised.

3 Ireland said it was meeting all the requirements set out by the Department of Communications and that many rural communities are now benefiting from services that would not have been provided by any other means.

The national scheme, which was completed last December, cost €220 million. Some €44 million of funding for the project was provided by the Exchequer and €36 million came from the European Union Regional Development Fund 2007-2013, with 3 Ireland providing the remainder.