Phone bills set to tumble as BT scraps 'peak rate': Price cut will save customers pounds 350m

BRITISH TELECOM stepped up the telephone price war yesterday by abolishing peak-rate charges for local and national calls.

The move lowers the price of calls made between 9am and 1pm by up to a quarter. It is the latest in a series of cuts, totalling around pounds 500m in a full year, which BT must introduce under rules set by the watchdog, Oftel.

BT's main rival, Mercury Communications, reacted swiftly by announcing the removal of its equivalent 'prime rate'. A spokesman for Mercury said: 'This shows that BT has at last woken up to the fact that it faces competitive pressure in local as well as long distance markets. If this sets the trend for future price reductions then it represents good news for all consumers.'

The abolition of BT's peak rate, which takes effect from 9 March, will save businesses about pounds 200m a year and households pounds 150m. It will bring down the cost of a three- minute local call by 5p to 15p between 9am and 1pm, and a three- minute national call by 10p.

The changes follow the introduction in December of lower weekend call charges and, more recently, of special rates for calls made to up to five numbers specified by customers. BT has also announced lower call rates on some international routes and a special scheme for infrequent users of the telephone.

Oftel said the latest move brings BT to within pounds 10m of the price reductions required in the 12 months to August. The watchdog added that the end of peak-charging will make it easier for people to understand their bills.

From 9 March, a single daytime rate operates from 8am until 6pm on weekdays, with cheap-rate charges from 6pm until 8am.

The Telecommunications Users Association, which has frequently complained that call charges are too complicated, said this was just a first step towards a more approachable pricing structure. The association also said that this and other price cuts would help BT's profits in future by encouraging people to make more use of the telephone.

Michael Hepher, BT group managing director, denied the company had been forced into the price change. He said it was responding to customers' needs. 'Some businesses have placed restrictions on their staff using the phone in the mornings. With BT they will no longer have to worry about that. So this is good news not only for all our customers but an important boost for the UK's economy.'

BT acknowledged that businesses would gain more than households from the abolition of peak- rate charges, but said that weekend call charges - introduced in December - were targeted more at residential consumers.

Leading article, page 15

Start your day with The Independent, sign up for daily news emails
Sport
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
Arts and Entertainment
Ricardo by Edward Sutcliffe, 2014
artPortraits of LA cricketers from notorious suburb go on display
News
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Sales Administrator - Spanish Speaking

£17000 - £21000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - German Speaking

£17000 - £23000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - Japanese Speaking

£17000 - £23000 per annum: Recruitment Genius: If you are fluent in Japanese a...

Recruitment Genius: Graphic Designer - Immediate Start

£16000 - £25000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'