BT takes on rival operators with £200m cut in call tariffs

BT, the UK's largest residential telecoms company, has slashed its prices amid intense competition from a host of rival suppliers. However, some charges will rise with BT reintroducing "per minute" pricing for day-time calls.

The cuts represent the largest ever reductions to BT's call packages and could collectively save its customers up to £200m. It follows the UK telecoms regulator Ofcom's decision to free the company from regulation after 22 years of price caps. BT has slashed the cost of its Option 2 package by 28 per cent to £3.95 a month, while its higher-usage Option 3 package will cost £9.95 a month, a cut of 31 per cent. The cuts will benefit 2.1 million subscribers on those packages. However, all of its 16 million customers will be eligible for free weekend and evening calls for a year if they sign up to an 18-month contract.

Consumer groups, however, said the majority of BT customers could see prices rise as "per minute" pricing replaces current "per second" charges. Customers using their phones during the day on cheaper packages will see charges rounded up to the nearest minute from October. Customers on BT's cheapest package will also now have to pay a 3p fee to connect a call.

BT also tinkered with other charges. It will offer customers a 25p monthly discount to line rental charges of £11 a month if they opt to receive their bill online. BT also made reductions to the cost of fixed-line to mobile calls and "non-geographic" numbers such as 0845 or 0870 numbers. BT also cut the cost of its voice over internet product by 29 per cent to £4.95 a month.

Separately, BT has also confirmed that the healthcare software company IDX, owned by GE Healthcare, has been replaced by rival Cerner to supply systems in the London area for the massive upgrade to the National Health Service's IT infrastructure. The replacement had been rumoured for some time and BT said it expects the transition to be complete by the autumn. BT said delivery of systems in London would continue in accordance with the agreed plan with the NHS.