BT has cut prices by pounds 1.3bn in three years and is committed to slashing at least another pounds 300m over the next 12 months, but it is still losing 50,000 people each month to cable companies offering telephone services. As these firms invest billions developing their communications infrastructure, other international telecoms companies such as AT&T and WorldCom of America are also entering the market, using BT phone lines.
AT&T's Calling Service, launched this month for national and international calls, is just the first of a number of services for home users to be launched this summer.
Users pay one of two flat rates on a national call, 7p a minute between 8am and 6pm or 3p a minute at other times. That compares to 9.8p and 5.8p from BT. With the basic service, which costs pounds 3.99 a quarter, when you sign up you also choose an area in the world to which you would like to make discount long distance calls - America, Asia, Australia/New Zealand or the European Union. Savings on calls to your chosen zone can be as high as 40 per cent on the regular BT price. The service is accessed by dialling 143 before the number you want to call. There are no savings on regional or local calls, which means anywhere within 35 miles from your home.
Given that subscribers pay BT's quarterly charges on top of AT&T's pounds 3.99, you need to be making savings on call charges of at least pounds 3.99 a quarter.
An AT&T subscriber who took up the option of discount calls to America would pay pounds 1.93 for a 10-minute call to New York, compared with BT's pounds 3.22. The same call would cost pounds 2.62 with SmartCall run by Mercury Communications, a well established operator. If you are calling Paris, however, Mercury has the cheapest rate. Clearly you need to choose a service according to the deal it offers for the parts of the world you are ringing. AT&T offers a service with a higher quarterly fee for those who want cheap rates for more than one zone.
As well as call rates and subscription fees (Mercury has a pounds 5.75 quarterly fee), comparisons are complicated by, for example, Mercury giving a 5 per cent discount on all calls made to five nominated numbers and between 15 minutes and two hours of free calls, depending on how big your bill is. A customer spending between pounds 25 and pounds 34.99 would be credited with 30 free weekend minutes in Britain. For national calls, Mercury users pay 17.6p for five minutes, which is also cheaper than AT&T or BT.
These providers of subscription services have focused on national and international calls, though AT&T says it can save you money if your regular BT phone bill is at least pounds 100 a quarter. But you can still save on your calls even if you do not make enough to want to sign up to a subscription service. Holders of a Visa credit card issued by Saga, the financial services and travel company, can save up to 23 per cent on national calls and 41 per cent on international calls. The card and service carry no fees but are only available to people over 50. Saga, which specialises in the over 50s market, has a deal to provide the service with WorldCom, an Amer- ican telecom company. People using the service dial a three-digit number before making calls, which are then billed to their Saga Visa card. The call costs are paid in the same way as any other purchases made with the card, which carries an interest rate of 18.9 per cent for people who do not pay off their bill at the end of each month.
The Saga service can also save you up to 20 per cent on regional calls - between about four and 35 miles from your home.
All of these schemes use regular BT phone lines. But it might be worthwhile considering a move to a cable company and abandoning BT. Bell Cablemedia, for example, cut its prices this month and claims that its customers save 25 per cent on all residential call charges compared with BT, including local calls.
Most cable companies will wire your home free if you decide to subscribe to their television services, but otherwise most charge around pounds 30. This may be attractive if, for example, you are considering having an extra phone line in your home, maybe for a fax or modem. BT charges pounds 116.33 for installation of a line. Bell Cablemedia also charges less for monthly line rental - pounds 6.90 against pounds 8.56 from BT.
To find out if cable services are available in your area call the Cable Companies Association on 0171-222 2900; Saga on 0800 300 225; AT&T on 0800 143 143; Mercury on 0500 500 194. Other services include: Broadsystem 0345 160200; First Telecom 0800 376 6666; ACC 0800 100222.