Carphone, BT scrap over voice prices

UK retailer the Carphone Warehouse has returned fire on incumbent carrier BT, slashing the prices of its fixed line voice packages and offering free international calls.

Last week BT threw the first punch in a pricing skirmish by cutting the cost of its Option 2 and 3 call packages by up to 20 per cent and reducing line rental to £10.50 for customers selecting an online bill.

On Tuesday, Carphone responded in kind for its TalkTalk service by reducing line rental to £10.50 for all customers, regardless of billing format and introducing an international call plan featuring free calls to 30 countries including the US, Australia, New Zealand and the whole of the EU.

Profits before tax for the year to end-March fell 9.5 per cent to £123m as the company absorbed £60.3m of losses relating to the launch of TalkTalk Free Broadband, which has been dogged by poor service and slow connection times.

Charles Dunstone, CEO of Carphone, said: “The customer service issues which arose from the unprecedented response to our Free Broadband offer have now substantially been addressed. We are now provisioning over 80 per cent of new customers directly onto unbundled lines, which simplifies the process and reduces waiting times to no more than three weeks from sign up.”

Group revenues at the firm increased 31 per cent year on year to £3.99bn boosted by the contribution from AOL UK.

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