TELECOM Eireann considered the possibility of turning the State into a single local call zone, the Oireachtas Committee on Small Business and Services was told yesterday.
However, the company calculated the price of such a move would almost double the current cost of a local call, its director of pricing policy, Dr Gerard Kernan, said.
A delegation from the semi state body told the committee that overall prices had been reduced by 60 per cent in the past four years.
The company was responding to competition "aggressively" and prices would continue to fall Telecom's corporate relations director, Mr Gerry O'Sullivan, said.
He pointed out that four years ago a trunk call cost 34 pence a minute compared with 18 pence a minute today. He admitted, however, that the cost of trunk calls was subsidising the company's losses on local calls.
The Fianna Fail spokesman on communications, Mr Seamus Brennan, said that trunk call charges were absolutely enormous" compared with local and international prices.
The committee chairman, Mr Michael Creed, said that "blatant discrimination is being practised by Telecom against rural areas".
"The same situation pertains in virtually every country in Europe," Mr O'Sullivan said. Telephone charges in Ireland were falling faster than in any other European country, he added.
A former Fine Gael minister expressed concern that the "almost fall of the House of Windsor might be mirrored in Ireland because of the ease with which mobile phone calls could be intercepted.
Mr Austin Deasy told the meeting that "we have almost seen the fall of the House of Windsor with the interception of calls by Squidgy, Princess Diana, in her clandestine affair with Mr Hewitt. And more recently Prince Philip's calls were intercepted."
He was concerned that the "whole system" in Ireland could collapse through intercepted calls because "every minister, every programme manager, every state driver, every committee chairman, every convenor has a mobile phone only backbenchers who keep the Government, going don't have mobile phones.
Mr O'Sullivan said mobile phone interception was a worldwide problem, not just an Irish one. However, he added that 087 mobile phone numbers could not be intercepted, because they were digitalised, unlike 088 mobile numbers.
Earlier, the ESB's managing director of customer services, Mr Ted Dalton, told the committee that "anything in the new ESB that is uneconomical has to close". He told Fianna Fail TD, Mr Colm Hilliard, that 22 ESB shops in the State were losing money and so would have to close. There would be no subsidisation.
He also defended the start up electricity costs charged to new companies.