Eircom has made a U-turn on charges for pensioners. The telecoms group announced yesterday that it was reducing the price of its Social Benefit Scheme available to around 270,000 people who qualify for the Department of Social and Family Affairs' telephone allowance.

Under the scheme, designed to ensure that elderly people can have a telephone and remain in contact with friends, relatives and social services, Eircom provides line rental, a handset and €1.46 a month in free calls.

Until last year, the cost of this service matched the Department allowance of €24.70 a month. Eircom then raised the monthly price of its package to €26.44, including VAT.

Following protests from groups representing the elderly and discussions with the department, Eircom reduced the monthly price of the package to €25.17, 47 cents over what the department allowance provided.

Eircom yesterday announced that it would bring the price of its Social Benefit Scheme back to €24.70, including VAT - the level it stood at before last year's furore. The change will come into effect on April 8th next.

Cathal Magee, managing director of Eircom Retail, said that, following discussions with the department, the company, rather than its customers, would now absorb the difference between the cost of providing the service and the department's allowance. "This is great news for customers," he said.

The company was unable to explain why it had taken 14 months to reverse the original decision, although a spokesman said there was an understanding that the decision to raise prices last year had not been well-received.