ESAT Telecom is to compete in the residential market from today, offering calls to anywhere in Ireland, for the cost of a local call.

Unveiling its package yesterday, the company claimed that it would be at least 10-15 per cent cheaper for calls than Telecom Eireann, a claim disputed by the State-owned company.

Esat's chairman Mr Denis O'Brien said yesterday that full liberalisation of the market, which allows Esat to compete for residential customers from today, presented tremendous opportunities. Esat, which has formed a new company, Esat Clear, to target residential customers, has introduced a series of new offerings. These include per second billing, rather than per unit billing offered by Telecom, and four pricing bands. These divide the world into four calling "areas" with daytime, evening and weekend rates. The service is aimed at anyone spending £100 or more on calls every two months. Esat said 40 per cent of phone users fall into this category. It hopes to capture 10 per cent of this 450,000 customer category by 2000. It said yesterday that 1,300 customers had already signed up for the service, before the pricing structure had been announced.

Esat Clear managing director Ms Lucy Gaffney said its research had shown that Telecom Eireann customers are paying for 40 per cent of the time they are not on the phone - because of the per unit billing system. She said their research had shown the average length of a call was 3.7 minutes.

Under the ESAT system, a call anywhere to Ireland would cost 19.03p at the weekday rate. The weekend rate is 6.73p. Ms Gaffney said research had shown four distinct areas to which consumers make calls. The first price band would be Ireland. The second is Britain, Europe, Australia/New Zealand, and the US. The third band is the rest of the world. The fourth area is for calls to Irish or British mobile phones.

There is also a separate pricing structure for Internet. This is 11.1p for peak time weekday use, falling to 6.28p off-peak and at the weekends.

There are also volume discounts of 7.25 per cent and 12.5 per cent which apply to monthly bills of £35 and £45 respectively. There is no rental costs, but customers will still have to pay line rental to Telecom Eireann.

Esat will install an autodialler - about the size of a bar of soap - in customers' homes. These will re-route the calls on to Esat's system.

A spokesman for Telecom Eireann said Esat had made two promises when the announcement on liberalisation was made last March. One was that it would offer a service to all residential customers, and second that it would provide a cheaper local call rate. "They are not delivering on either of those fronts - they are not doing business with 75 per cent of the market who have bills of less than £30 per month," he said. "Secondly, they said they would offer cheaper local calls. They are not delivering on that either."

For example, he said the rate that is normally quoted internationally is for a three minute call, and Telecom is 40 per cent cheaper than Esat for a three-minute call. For 15 minute off-peak call, Esat are almost three times as expensive.