BT forces the issue in voice market

7 Apr 2003

BT has upped the ante against its competitors in Britain by announcing that it is to introduce major changes to its consumer pricing arrangements.

Any price distinction between local and national calls will be eliminated meaning that all UK daytime fixed line calls will be charged at a single rate of three pence sterling per minute.

There will also be no per minute charge for weekend and evening calls to UK fixed line destinations – these will be charged to its BT Together subscribers at a rate of 6 pence per call for calls up to one hour.

It is also launching a fully unmetred package for national calls at £28.50 sterling a month.

Industry analysts Ovum say the move is a pre emptive strike in the intensifying battle for consumer voice.

“While NTL and Telewest are busy dealing with their financial woes, wholesale line rental introduction has encouraged retail outlets such as Tesco, Argos and the Post Office to enter the consumer voice market.”

It added. “With the UK mobile market saturated and the take-up of advanced mobile data services slow the mobile operators are a continued threat to its voice business. Despite the cuts in the mobile termination rates and 3G network investment the entry of Hutchison 3G means that a voice price war between them might erupt.”

Responding to the move by BT a spokeswoman for Eircom told “Different markets work in different way: The way our pricing is structured is that we look at calling patterns of our customers and offer the best value on the calls they make most – which are local calls, so that clearly customers are seeing value for money.”

She added: “Obviously we review our pricing and monitor the marketplace but that is currently how our pricing is structured. That the structure that’s working best in this market. We don’t have any plans to change that approach at the moment.”

By Suzanne Byrne