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]
J1043+2408 was observed for more than 10 years, and its radio light curve exhibited a periodic signal repeating in about 563 days
Success of Unity's test flight means Virgin Galactic is now close to taking its first paying tourist into space
V3 puts the pro-level football GPS tracker through its paces, and asks if it's more than a gimmick
Finding refutes many earlier studies that suggest that galaxies don't have much dark matter at the time of their birth