MONEY COMMENT
Major Price Cuts For BT Customers

By Cliff D'Arcy
April 2, 2003

BT Group (LSE: BT.A) has introduced a radical new pricing structure for its BT Together plans, which takes effect on 1 June. Thanks to the new pricing, some call rates will be up to 25 times lower than those charged by BT's main fixed-line rivals.

With the new BT Together options, BT plans to scrap per-minute charging for all evening and weekend calls, with national and local calls charged at the same rate. BT Together customers will pay 6p for all evening and weekend calls lasting under an hour to anywhere in the UK. Also, if the call is to a "Friends and Family" number, its cost will be reduced by a further 10%.

BT claims Telewest (LSE: TWT) customers will save money on every call, and customers of ntl and One.Tel will save on all national calls lasting over a minute. Here are some example savings:

* a one-hour national evening call will cost 6p with BT, compared to £1.53 with One.Tel;
* a 10-minute national evening call using Carphone Warehouse (LSE: CPW) will cost 13p more;
* for the same price as Telewest charges to connect a call, BT Together customers will be able to talk for an hour, and;
* a half-hour national weekend call will cost 6p with BT Together, 45p with British Gas (LSE: BG.), 57p with Carphone Warehouse, and a whopping £1.08 with the Post Office.

(Read more comparisons in BT's press release.)

BT Together's ten million customers will be offered three new options (each monthly fee includes monthly line rental and VAT):

Option 1 (£11.50pm = £138 a year)
For all evening and weekend UK calls, you'll pay a flat rate of 6p for up to an hour and then 1p per minute for calls lasting over an hour.

You'll pay 3p a minute (minimum 5p) for UK daytime calls, which is a quarter less than the previous charge for national calls.

What's pretty impressive is that BT claims that none of its competitors can beat this option for calls lasting for between five minutes and an hour (to anywhere in the UK at any time).

Option 2 - The Evening and Weekend Plan (£17.50pm = £210 a year)
You'll pay nothing for the first hour on all evening and weekend UK calls. You'll pay 1p for every minute over an hour.

Charges for UK daytime calls are the same as for Option 1.

Option 3 - The Anytime Plan (£28.50pm = £342 a year)
You'll pay nothing for UK calls lasting up to an hour at any time. You'll pay 3p for every minute over an hour for daytime calls.

Note that if you don't pay by direct debit or monthly payment plan, BT will charge you an extra £1 per month for each option.

There's no doubt that these call charges are lower and easier to understand than those of many of BT's rivals. What's more, it doesn't matter where you're calling in the UK, only when you call: either daytime (weekdays, 8am to 6pm) or evenings and weekends.

Of course, you have to balance the lower call charges against the higher monthly fees but if you're a heavy phone user with a largish bill, you may find you'll be a lot better off switching to one of these options, probably Option 1.

If you've already switched from BT to a competitor, you should definitely take a long, hard look at your current charges (or recent bills), as you could well be better off with BT Together.

Incidentally, if you do like to talk for hours at a time, buy a kitchen timer and set it for 59 minutes as you dial for a long chat. When the timer starts beeping, hang up and call back. Because you can redial as often as you like, you'll never pay more than 6p a call at evenings and weekends!