Eir is asking the State to reimburse €56m which it has spent operating rural phone lines.

This comes after news emerged last week that the telecoms company was handed a €3m fine from Comreg for missing a number of performance targets in relation to connecting and repairing rural phone services. It highlighted a series of major storms as a mitigating factor which impacted on these services.

Despite rapid changes in the communications market, Eir remains the State’s universal social provider which requires it to supply phone lines in remote (and unprofitable) areas at a cost of up to €7,000 - if it costs more then the individual or business must also contribute.

It has argued that this cost should be shared by all telecom providers operating in the Irish market.

It is seeking €12m from the State for providing these lines last year and a further €44m for providing these services between 2010 and 2015 according to The Irish Independent.

"ComReg will verify if there is a net cost, determine whether or not any such net cost constitutes an unfair burden on Eir and if so, it is necessary to establish a sharing mechanism," the communications watchdog said in a statement.

Eir has argued that the funds spent providing these services would be better used if it could be invested in its mobile and broadband services.

The company is also required to offer public payphones and to publish phone books.