BT cuts prices

BT has announced its latest round of price cuts. Its Option 3 call package, which allows unlimited calls to landlines, has been cut from £9.95 to £7.95.

Option 2, which allows unlimited evening and weekend calls, has been cut from £3.95 to £3.45. Line rental has also been cut by 25p a month to £10.50 for customers who choose paper-free billing and pay by direct debit. From 2 June, BT will be promoting its latest price cuts with a high profile advertising campaign.

Karen Darby , founder of SimplySwitch.com, the price comparison and switching service, comments: "These latest price cuts are great news for the consumer. BT still dominates the UK's telecoms market so it's encouraging to see it lead the way in terms of pricing. With these cuts in place, BT currently tops the tables as the UK's best value inclusive call-package provider. However, it won't be long before rival telecoms firms respond by slashing their own prices, sparking a price war that will further benefit the customer.

"BT is making a concerted effort to move customers away from its 'pay-as-you-go' Option 1 package onto deals that contain inclusive calls. From today, non-BT customers, and customers currently on Option 1, will be able to sign up to an 18-month contract for Option 2 and receive the first 12 months for free.

"This is a great deal from BT and will undoubtedly tempt many people over to their inclusive package. However, we would still urge customers to check their monthly usage in order to determine whether an inclusive deal is right for them. For instance, customers who have a BT landline in order to access broadband, but rarely use their phone, might be better off sticking with Option 1.

"It will be interesting to see if BT extends its price cutting activity to other areas such as broadband, BT Vision and BT mobile. Currently, rival suppliers such as TalkTalk and Tiscali offer cheaper deals to customers taking home phone and broadband. BT recently overtook Virgin Media as the UK's largest broadband provider. We urge BT to use its market leading position to offer industry-beating deals on bundle packages."