BT sparks price war

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Consumers should be in for bumper savings on their phone bills in the coming months - as two of the UK's largest companies start a price war.

BT sparked the tussle by slashing up to 20 per cent off the price of some call packages - saying that over three million of its customers will see around £34 million cut off the cost of their bills over the coming year.

And it told customers currently on its BT Together Option One package that they could make savings if they upgrade to either Option Two or Three.

In response, rival TalkTalk has cut its line rental to £10.50 per month - and it has undercut BT's prices on two of its equivalent packages.

Firstly, its Talk2 package, which allows unlimited evening and weekend calls, has been reduced to £3.39, six pence below the BT similar option. And it has slashed prices on its Talk3 option to £7.49, undercutting BT by one pence in the process.

Market commentators suggest that, as competition increases and margins become tighter for providers, they will have to rely on improved service should they wish to win over customers from rival companies.

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