Everybody's talking at you on phones As the Post Office delivers a landline deal, Sam Dunn cuts through a tangle of tariffs to help you find the best rates to beat BT
The Independent
16 January 2005It could be time to hang up on your phone company. A battle between service providers, each wanting a bigger slice of our £4.3bn residential landline market, is helping to cut the cost of calls and offer highly attractive deals.
BT currently has a 70 per cent market share but competitors are seeking to change that. The Post Office is the latest to pitch into the fray, offering a single tariff that it says can lop up to a fifth off bills compared with BT.
As part of the HomePhone deal from the Post Office, peak-time national calls are charged at 2.5p a minute. Calls to mobile phones are charged at a uniform rate, regardless of network. The Post Office has also taken advantage of new legislation allowing it to merge line rental and call charges into one bill; it hopes this will give it the edge over "carrier pre-select" (CPS) companies such as First Telecom, TalkTalk and Tele2.
CPS companies simply reroute calls on BT lines, and customers pay a separate fee for line rental on top of call charges.
Many in the industry hope the entry of a high-profile brand like the Post Office into the home phone market will encourage millions to consider a different provider for the first time.
"A lot of people haven't wanted to move from a big company like BT to smaller rivals, but the Post Office's size and brand could change this," says Karen Darby of price-comparison service SimplySwitch. "Wherever you go, you should be able to get a cheaper deal than with BT."
But that may be easier said than done. With nearly 200 different fixed-line home-phone suppliers touting a bewildering smorgasbord of tariffs, comparing deals can be difficult.
For example, Tele2's High User tariff costs £9.95 a month and gives unlimited free UK local and national calls at any time of day. But there are important exclusions: calls to mobiles and to 0845 and 0870 numbers are not free. The cost of calls to mobiles varies between networks.
The key to switching home- phone provider - usually away from BT - lies in identifying the kind of user you are.
A report last year from the Which? consumer body suggested that, if you make a lot of daytime and international calls, as opposed to off-peak ones, you'll probably make considerable savings by leaving BT.
"Changing will become more popular with greater choice, but only if consumers are informed about what's available," warns Allan Williams, senior policy officer at Which?.
Those who respond directly to adverts for home-phone services offering "cheaper calls than BT" may find it difficult to cut through the marketing information to decide whether they will be better off with that particular provider.
In many cases, the simplest way to see what is available is to use an internet price-comparison service such as unravelit.com, simplyswitch.com or uswitch.com. When you log on to one of these, you will need to provide details of your typical phone call "patterns"; this allows the comparison service to find the best deal for you.
"You need to know roughly how long you call for; whether your calls tend to be local, national or overseas; the number of calls you make in a month; whether you call mobiles; and the time of day you make most of your calls," says Ms Darby.
Typing in all this information shouldn't take more than 15 minutes. The online service will arrange the switch for you by contacting your current and future providers (a process that takes about two weeks). Alternatively, you can contact the new provider yourself.
If you let the website do the work, it will take a small commission fee, but this will not affect the tariffs put before you.
When you sign up with a new provider, you'll have 14 days to change your mind and cancel the contract without penalty.
When using price-comparison websites, be aware that the number of deals on offer varies between services.
Uswitch.com will choose the best deal from 25 of the biggest companies. Simplyswitch currently covers only 12 companies, while unravelit.com has 16 to choose from. The services claim that big savings - between 70 and 90 per cent - can be made by switching. But if you do sign up to one of their offers, keep an eye on your bills to see if the savings are as much as promised. There's nothing to stop you switching again.
Many people who have a TV/internet/phone package via a cable provider (typically NTL or Telewest) have in effect switched from BT already. They may not save as much as others by switching again, and their choice of CPS provider will be limited by their cable provider. To take advantage of the full range of offers coming on to the market, they will have to go back to BT and then switch again.
Since April last year, unravelit.com alone has moved more than 4,000 home-phone customers. Florian Ritzmann, the service's commercial manager, thinks there are many more potential customers out there. "Phone switching is still at least two years behind the switching market for gas and electricity."