Consumers can expect an 18 per cent hike in broadband prices from next September as a result of changes to Eir’s wholesale rates.

The State’s largest telco rents space on its network to rival operators such as Vodafone, BT, Magnet and Sky, as well as its own retail arm.

From September, it plans to raise fibre broadband prices for wholesale customers from €19.50 to €23 a month. Non-Eir operators have signalled the hike, which has been approved by regulator Comreg, would be passed on in full to consumers.

Eir, however, said the rate increase, when combined with a €2.11 reduction in its traditional fixed-line rental rates due in July, was broadly price neutral, and therefore did not necessitate a price rise at the retail end.

The assertion was disputed by rivals, which claimed the two price changes related to different product sets and could not be used to offset each other.

Alto, the umbrella group for non-Eir companies, described Eir's move as "cynical", claiming it bore no relation to the costs associated with providing the service. "With improved efficiencies and economies of scale, the costs should actually be decreasing," Alto spokesman Ronan Lupton said

He said Eir was imposing such charges with impunity and without any regard to the impact it would have on wholesale customers and ultimately the consumer.

In the context of the National Broadband Plan, Mr Lupton said Eir’s move emphasised the importance of having “very strict price controls on the winning tenderer”.

However, Eir defended the price changes, saying they were linked to the company’s increased investment in high-speed fibre broadband.

“We believe it is fair that we can make a reasonable return on investment that delivers much improved services,” the company said in a statement.

The likely price hike comes in the wake of an analysis by the European Commission, which suggested Irish consumers already face the second highest prices in the EU.