O2 HAS settled its legal challenge against the telecoms regulator ComReg over its decision to increase the handling charges for emergency calls.

Both parties declined to disclose the terms of the out of court settlement. O2 brought the challenge in March. It was challenging the decision by the Commission for Communications Regulation (ComReg) to allow the maximum call handling fee for its emergency call answering service to increase to €3.35.

BT Ireland is the current operator of the service, having won a five-year contract to operate the service in 2009 after a public tender process.

The contract is estimated to be worth about €50 million.

More than 3.3 million emergency calls were made in the State last year. While they are free to those who make them, the cost of handling them is covered by a call handling fee which is paid to BT by phone providers, including O2, who forward the calls to BT.

When BT entered the contract in 2009, the initial maximum handling fee for emergency calls was €2.23. The handling fee is reviewed annually by ComReg, according to the regulator. ComReg said it will shortly be undertaking the statutory review of the call handling fee for the year from February 12th, 2012.

ComReg said the main reason for the 50 per cent increase in the handling fee was the decline in the volume of emergency calls from 4.8 million in 2006 to a projected 3 million in 2011.

A spokesman for O2 said it took the legal challenge to gain greater transparency on the rationale for the cost increase.