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
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
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

Ashdown Group: Marketing & Sales Manager

£40000 per annum: Ashdown Group: A reputable organisation within the leisure i...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Recruitment Genius: Doctors - Dubai - High "Tax Free" Earnings

£96000 - £200000 per annum: Recruitment Genius: Looking for a better earning p...

Recruitment Genius: PHP Developer

£32000 - £36000 per annum: Recruitment Genius: A rapidly expanding company in ...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste