Rival firms that want to use Eircom's telephone exchanges to offer broadband services to consumers will pay 45 per cent less to the company from next week.

The price cut follows a new deal agreed between Eircom and the Commission for Communications Regulation (ComReg) yesterday over a technical process called "local loop unbundling".

Local loop unbundling is the name given to a regulatory initiative to open the dominant telecoms firm's network for use by competitors.

Until now, Ireland has had one of the lowest numbers of "unbundled" telephone lines in Europe, in part due to the high cost for rivals of entering Eircom telephone exchanges.

Rivals have consistently complained that the suite of charges that they face when attempting to gain access to an Eircom exchange made it uneconomical to invest in "unbundling". This has meant there are now fewer than 2,000 fully unbundled telephone lines in the Republic and most rivals have chosen to repackage Eircom's own broadband for resale to customers.

ComReg said yesterday it welcomed the price cuts agreed with Eircom which should enable other firms to offer customers competitive services such as voice and high-speed broadband internet access.

Earlier this week ComReg also proposed reducing the monthly fees that rivals pay Eircom to use its telephone lines to deliver broadband internet services.

ComReg chairman Mr John Doherty said local loop unbundling could play an important role in developing competition in Ireland and Europe.