War over [landline] call charges

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From The Timesonline

March 27, 2004

One.Tel still cheapest after tariff shake-up

CHANGES to telephone pricing plans announced this week will not affect One.Tel’s status as the cheapest residential phone service.
USwitch.com, the telephone price comparison service, says that from July 4 an average user of One.Tel’s Call Saver plan, currently the cheapest deal, will pay £229.77 a year for phone services.

BT and The Carphone Warehouse announced changes to tariffs this week, kicking off a price war in the residential telecoms market. But the two providers will still cost more than One.Tel. Average users of BT’s cheapest deal, the Together Option 1 tariff, will pay £243.36, according to uSwitch. Meanwhile, TalkTalk customers will pay £234.22.

BT announced this week that it was scrapping its standard tariffs and putting its nine million users on one of its Together discount packages.

The Together packages charge more for line rental but less for calls. BT says that two thirds of its users will be better off. Currently, BT standard tariff users pay £279.45 on average, uSwitch says.

Some light users and customers who lease a BT line while using a phone service from another provider may find themselves paying more, but the most significant effect may be on consumers who use other networks. Many users pay line rental to BT and their call bills through another provider. The Together line rental is £12 a year more expensive than the standard tariff, meaning total bills for some networks may rise.

The Carphone Warehouse followed up with its own changes on Thursday, announcing free calls between its TalkTalk customers.

In addition, the company has strengthened its guarantee that its customers’ bills will be cheaper than BT’s. It says that it will give £1,000 to those who pay more on its tariff. Previously, it was offering £500. It added that it had never paid out.

The company also raised the prospect of free international calls. It is looking to set up TalkTalk services in three European countries — Spain, France and Switzerland — all of which could be running this year. UK customers will be able to call international TalkTalk customers free once the service is rolled out on the Continent.

BT’s new tariffs come in on July 4, while The Carphone Warehouse’s new charges take effect next week.

Jon Miller, a director of uSwitch, welcomed the price changes, saying: “We fully expect other suppliers to continue to react over the coming weeks by cutting prices and improving and simplifying customer plans.”

ALEX HAWKES

And From The Timesonline

March 28, 2004

War over call charges

Competition among telephone firms should result in cheaper bills for most households. By Clare Francis

TELEPHONE suppliers are engaged in a price war that should lead to cheaper deals for customers.
BT is switching about 8.9m people to a different tariff, which should bring down the cost of the typical annual bill.

Carphone Warehouse is also offering free calls between customers of Talk Talk, its landline service, from April 1.

Other telephone companies are expected to cut the costs of calls over the coming weeks. But which firm offers the best deal?

BT is transferring all customers on its standard residential tariff to its “Together Plan Option 1”. People on the standard rate are currently charged £9.50 a month in line rental if they pay by direct debit or £10.50 for payments by cheque. They are charged per minute for every call.

Together Option 1 currently costs £11.50 a month, but the price will be cut to £10.50 a month from July 1. The line rental will be £1 higher than for people on the standard scheme who currently pay by direct debit, but the call charges are lower. Most people will therefore benefit.

Customers on the standard rate are currently charged 3.95p a minute for peak-time local calls and 7.91p a minute for national calls. They will pay 3p a minute under Option 1 for national and local calls.

The standard-rate charge for local calls in the evening is 1p a minute and 3.95p a minute for a national call. The cost under Option 1 will be a flat rate of 5.5p for the first hour of the call and 1p a minute thereafter.

Uswitch.com, a comparison service, calculates that BT customers will save an average of £24.09 a year. But they could save more by switching to a different call company.

The telephone industry was deregulated 20 years ago, but BT still has 71% of the residential phone market.

Rival firms such as Carphone Warehouse, One Tel, British Gas, Just Dial Saver and Tele 2 have pulled in about 2.5m customers between them. If you switch to one of these companies, you keep your BT line but your calls are automatically rerouted through the new service.

Customers of these companies will, however, pay monthly line rental of £10.50 to BT from July, up from £9.50.

Jon Miller at Uswitch said: “It is encouraging that in most cases BT customers will see their bills decrease, but people who route their calls through another company will be paying £12 more a year. We therefore expect rival firms to cut their own call charges.”

Carphone Warehouse has already made its move. Its tariffs are similar to BT Together, but any calls between customers on Carphone Warehouse’s Talk Talk scheme will be free from Thursday. The cost of phoning a non-Talk Talk customer on its Talk 70 plan is 2.7p a minute for peak-time calls and a total of 5.5p for up to 70 minutes for calls made in the evening or at the weekend.

Changes that will come into effect later this year will allow customers to get both line rental and calls from the same firm, so they will be able to quit BT altogether.

The best deal will depend on how much time you spend on the phone, when you make the calls — and to where. If you use the phone a lot, unlimited free calls is probably the best option. If you make only a few calls in the evening, it will probably be cheaper to opt for the lowest monthly fee.

To find out which company offers the best deal for you, go to Saveonyourbills.co.uk or Uswitch.com.