Argos, yes Argos, to offer telco services

Argos has become the first high-street retailer to sell cut-price phone calls to BT landline customers.

Through its CallSave service it claims it can offer existing BT customers calls at half the price.

While Argos expects many other retailers to follow in its wake, Matthew Nordan, research director at Forrester Research, is not convinced more than "one or two" will do so this year.

He also argued Argos will make not any short-term gains from the move because the company is entering a high-volume, low-margin business.

Nordan said: "I doubt Argos will have the volume to make the business work in the short term."

But there could be other indirect gains for Argos. Customers who sign up will be presented with a monthly bill and as such enter into an ongoing relationship.

Nordan said: "It seems like a fairly logical decision. Retailers tend to have an apathetic relationship with customers and cannot guarantee their regular attention."

Anna Lord, brand controller at Argos, admitted that in addition to taking advantage of millions of fixed-line phones it sells each year, it is also offering the telecoms service to improve customer relationships.

The concept of reselling landline services it not new. Telcos such as BT have flirted with the idea of farming out the customer contact element of their business many times.

This would potentially relieve theme of the burden of finding and maintaining customers and allow them to get on with the business of making money from their infrastructure alone.

However, Nordan claims this has not happened for one good reason. "There are people at BT that have made their careers in customer support," he said.