BT to cut long distance telephone prices

BT is planning to offer cheaper international calls to landline customers in a bid to compete with low-cost rivals, silicon.com can reveal.

Alternative long-distance providers such as One.tel have long been undercutting BT's prices for international direct dialled (IDD) calls.

A one minute call to the US with BT costs 24p per minute, whereas a rival company such as One.tel would charge just 3p per minute, which works out cheaper than a call to a next door neighbour with BT.

BT has moved slowly to cut IDD prices, counting on customer inertia to keep cash flowing in from those who haven't got round to signing up with cheaper rival providers.

In an interview with silicon.com, BT Consumer managing director Angus Porter indicated that the company will soon move to eradicate price discrepancy between itself and the competition.

He said: "It is something that has bugged me for a while. We are working very hard on a new offer for IDD.

"We are not allowed to sell services below price, and we are bound by the termination charges in our contracts with operators around the world.

"So we are never going to be cost competitive with our rivals, but we want to make it not worth the hassle of getting another bill."

The programme could take a similar form to BT's existing Friends and Family package, which gives discounts on the numbers customers call most often.

Porter added: "Most of our customers only call a few international numbers, like a relative living overseas, for example. So you may see something along those lines."