Recent comments by a senior Babcock executive about the quality of Eircom's infrastructure and the scale of investment required to improve it over the coming years have sparked fears that Babcock will seek an increase in line rental when it assumes control of the company.

A spokesman for Eircom said the company had no comment to make about its investment plans or line rental charges. However, sources believe the company could increase line rental by as much as 6% over the current price of 24.18 within the pricing rules laid down by the communications regulator Comreg.

Eircom has not increased prices since 2004, when three hikes in line rental over 12 months caused a public outcry. Sources believe the company will increase charges to recoup at least part of the cost of its investment programme.

"We have the new owners of Eircom saying, actually you know, the network is the worst in Europe. The worrying thing is, now that they're saying the network is bad, where is the money going to come from? There's a distinct possibility that line rental is going to go up again, " said Damien Mulley, founder of lobby group Ireland Offline.

Earlier this month Robert Topfer, Babcock's global director of corporate finance, slated Eircom's high-speed internet service, saying it had the "worst broadband in Europe".