RTE and An Post face further headaches next year, as their budget allocations are slashed by millions.

The Government has revealed a €7m cut back on funding for RTE, An Post and the Broadcasting Fund within the Budget.

This will come as a fresh blow to An Post, which confirmed it would axe nearly 1,400 jobs to tackle falling mail volumes across the state.

The postal service said that it was preparing for liberalisation of the mail market, which will open up to full competition on January 1, 2011.

And last year, RTE recorded a drop in turnover from €440m to a projected €360m, with advertising revenues down about €70m.

The broadcaster has reduced its cost base by up to €60m through a combination of pay and service cuts, as well as non-replacement of retirees, while RTE's top 10 broadcasters earned €4.5m last year.

The Department of Communications estimates that the broadcasting budget alone will be slashed by 6pc and cuts will amount to €13m.

Despite the reductions, Minister Eamon Ryan said that €45m will be spent next year on the modernisation of Ireland's telecommunications infrastructure.

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This includes the National Broadband Scheme to bring broadband coverage to certain designated areas in rural Ireland, where coverage is deemed insufficient.

This scheme directly supports some 250 jobs.

High-speed broadband will also be delivered to 78 secondary schools across the country.

The Sound and Vision fund for independent broadcasters will be increased to €14.6m, which, the Department said, allow the creative arts "the support they require to tell Irish stories to Irish viewers".

Additional savings will include reductions in funding for TG4, and the Central and Regional Fisheries Boards.

And there was an extra €5m provided for the Petroleum Infrastructure research programme, which is funded by the proceeds of an exploration licence.

Earlier, Colm McCarthy's Bord Snip report recommended the merger of ComReg with the new Broadcasting Authority of Ireland.

This would be the result of merging the Broadcasting Commission of Ireland and the Broadcasting Complaints Commission, and the regulatory functions of the RTE Authority.

The report notes that the new Broadcasting Authority of Ireland will be funded by an industry levy, which will save the Exchequer more than €6m each year compared with the existing arrangement.

clairemurphy@herald.ie

- Claire Murphy