Caudwell attacks BT with new offer

John Caudwell, the entrepreneur behind the Phones 4U mobile phone shops, has launched an aggressive attack on BT Group's traditional domestic fixed-line business.

John Caudwell, the entrepreneur behind the Phones 4U mobile phone shops, has launched an aggressive attack on BT Group's traditional domestic fixed-line business.

Mr Caudwell announced yesterday that for £34.98 a month Homecall Everything includes all local and national calls anytime, plus unlimited 512k broadband internet connection and line rental. He said this compared with BT's equivalent monthly charge of £50.49, representing an annual saving of £186.12. "If just 15 per cent of BT's nearly 20 million residential customers switched to the Homecall offering, they would save over half a billion pounds every year," Mr Caudwell said.

His service is unusual because it includes line rental. Most rivals to BT leave the line-rental charge with BT, which bills customers £10.50 a month. This is because BT charges its rivals more for leasing a line wholesale than they can charge their retail customers for the same line. Mr Caudwell said: "It is completely wrong that retail charges are lower than wholesale. It's blatant protectionism by BT. However, I can understand them doing it. My criticism would be with Ofcom [the regulator] for letting it happen."

However, Mr Caudwell said he was willing to make a loss on this element because over 30 months his service would break-even on a customer by customer basis. He admitted this was a significant risk and was based on the assumption that customers would stay with Homecall for a considerable period of time.

He said that in just two weeks of trialling the company had already signed up "tens of thousands of customers".

Homecall comes after other aggressive launches from rivals such as Carphone Warehouse, which targeted BT customers with its TalkTalk service.