Mobile phones, once widely regarded as an expensive way to make a phone call, will soon become cheaper than using a BT land line for some UK callers.
Britain's smallest mobile operator One 2 One will slash its call charges from 29 April by removing the distinction between local and national calls, and reducing off peak national calls to just two pence per minute.
Nearest rival Orange quickly said it would match One 2 One's prices, while Cellnet - which will next month rebrand as BT Cellnet - and Vodafone said they have no plans to alter their existing tariffs.
Both prepay and contract One 2 One customers will be able to make calls for no more than 10 pence per minute nationwide during the day and two pence per minute at other times.
While BT charges 1.5 pence per minute for off peak local calls, its off peak national calls are 3.9 pence per minute, almost double One 2 One's new rate.
One 2 One hopes to attract a sizeable market of people who like the prepay model, but want the cheaper calls previously only available to contract customers. Analysts agreed, saying the UK mobile market is still too expensive.
"By reducing prices they will introduce a new market that's not been able to afford mobiles before," said Dataquest analyst Dirk Bout. "The more mature the market gets, the more difficult it is becoming to attract new customers."
A spokesman for Orange said the operator was reviewing One 2 One's new tariffs, but confirmed that "the One 2 One tariff will be available on the Orange service."
Cellnet said it had no plans to alter its tariffs because it doesn't make pricing decisions in response to what other operators do. "We feel our tariffs are already competitive," a spokesman added. Vodafone gave a similar response.
To comment on this story, email [email protected]
Nanocrystals embedded in glass or a polymer could be the next step for nano-crystal storage method
Space Telescope to be used as part of the organisation's Transiting Exoplanet Survey Satellite
Second quarter PC sales up by 2.7 per cent, suggests IDC
Apple updates MacBook Pro with Coffee Lake CPUs, 32GB memory and up to 4TB storage - at a price, of course
A maxxed out MacBook Pro will cost a mere £6,209