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Post Office takes on BT with phone offer

Post Office takes on BT with phone offer

LONDON (Reuters) - The Post Office has unveiled plans to launch a home phone service by early next year, hoping to poach a million households away from market leader BT and explore new revenue streams.

The state-owned Post Office has for some time been looking for new ways to boost revenues, under threat from e-mail and falling use of its network for welfare and other payments.

Having already ventured into car insurance, financial services, foreign exchange and phone cards, the 350-year-old Post Office sees the home phone service as the next major area where it can use its 16,000-strong branch network.

"Ours is one of the most trusted and most recognised brands in the country, which we are looking to leverage," said Simon Carter, head of marketing at the Post Office, on Thursday.

BT owns the 'last mile' of phone line connecting telephone exchanges to virtually all of the country's households but it is forced to rent line capacity to carriers that offer phone services in direct competition with BT.

Called Post Office HomePhone, the new service will join the ranks of similar services offered Carphone Warehouse's TalkTalk, Central Communications' OneTel and Sweden's Tele2. BT is the clear market leader with 21 million customers.

The Post Office, which will also rent BT lines, hopes that its brand will appeal more to consumers than those of other BT rivals, aided by its huge branch network, one of the biggest in Europe. It plans to poach one million users within five years.

The Post Office has signed agreements with Cable & Wireless, the UK's second biggest corporate telecoms provider, and two other firms, Inkfish and Servista, for its service.

C&W will handle all the operational and technical parts of the service, with Inkfish providing call centre support and Servista the billing system. The Post Office will pay all three fees for their services, details of which it did not disclose.

HomePhone will also be amongst the most competitive in the marketplace, the Post Office said, but did not disclose tariffs.

Carphone Warehouse kicked off a major price war last March, offering free calls to customers between TalkTalk numbers. TalkTalk, launched in February last year, had over 385,000 by the end of March 2004 and is targeting 900,000 by end-March 2005.

July 4, 2004 at 03:11 AM in Telecommunications | Permalink | TrackBack (3) | Top of page | Blog Home