Tesco Becomes Telco Player

Tesco launched its Internet phone on Jan 19th, a move that will likely bring calls made over broadband to a mass market.

Users pay a fixed price for the VoIP phone and a pay-as-you-go rate for all calls made – plus their usual broadband charge.

The handset and start-up pack costs £19.97, including £5 of free airtime.

Calls from Tesco's new Internet phone both within the UK and to popular international destinations such as the US, Canada and Australia are priced at just 2p a minute, while calls to UK mobiles cost only 10p a minute.

Calls to other internet phone users are absolutely free wherever they are in the world.

Retailer DSG international, the parent company of Dixons, Currys, The Link and PC World, launched its own internet call service called Freetalk last year.

Similarly, it claimed the move was the beginning of the end for the traditional landline.

Currently 8.1 million UK households have broadband internet access and are able to make phone calls online.

MORE.

A Newsweek article suggests that the Tesco move, following in the footsteps of Vonage and Skype, will precipitate a sharp drop in the stocks of big telecoms.

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Time to re-visit Pulver.