Mercury is extending free local, offpeak calls, already available to personal customers, to those paying business tariffs.
City analysts reckoned the revised charges showed that Orange was proving more attractive to higher-spending business users than One-2-One. Although the Mercury system has 100,000 customers it refuses to reveal average revenue per subscriber.
One-2-One was launched last year in and around London, offering free local calls in the evenings and at weekends to personal subscribers. But they paid more than business customers at peak times and for long-distance calls.
Up to 80 per cent of subscribers are estimated to have taken up the personal deal, many of them using the service almost entirely for free calls.
One-2-One has cut monthly business subscriptions from pounds 20 to pounds 17.50 and reduced peak-rate calls from 16p a minute to 14p. For a fee of pounds 10 a month, business users can make free local calls after 9pm and at weekends. For a further monthly fee of pounds 2.99 they may make international calls at 10 per cent lower prices than BT's basic charges.
Gerry Whent, chief executive of Vodafone, said last week that Orange and One-2-One have cut prices to the bone, and claimed that they could not charge a penny less if they wished to build a profitable operation.
Richard Goswell, managing director of One-2-One, said: 'We certainly believe we can make a satisfactory business and a profitable one on these tariffs.' He denied that the cuts for business represented a change in strategy. 'We have got consumers interested and now we wish to offer businesses the same opportunities to take advantage of mobile telephones.'
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