Tesco launches free calls on internet telephone service

LONDON - Tesco has launched a free-call internet phone service in an attempt to encourage customers to switch from using traditional phone services and benefit from no line rental, installation or contract costs.

The £19.97 flat-fee package is being launched by Tesco Telecoms and Australian based Freshtel. The service will be rolled out across 350 stores in the next few months.

The package includes software on a CD and a handset, allowing users to make unlimited free calls over the internet to someone sitting at their computer anywhere in the world.

The service is Tesco's version of Voice over Internet Protocol, which is already being offered by BT and Dixons.

The new service will allow users to call landlines in the UK and up to 20 foreign destinations, including the US, Canada and Australia for 2p a minute. Calls to UK mobiles will be charged at 10p a minute.

The pack will include £5 worth of free calls once registered, and users can choose a non-geographical phone number, which they can permanently keep.

The service is only open to those who have broadband internet access because VoIP needs an always-on connection. With approximately 8.1m households in the UK already using broadband, take-up is expected to grow.

Google, AOL and the eBay-owned Skype, among others, already launched their own services in what is tipped as one of the hot areas of online growth in 2006.

Andy Dewhurst, chief executive officer of Tesco Telecoms, said: "Consumers have not yet caught on to internet calling, but this is now set to change. What they have been looking for is a service that is simple, easy to use, convenient and great value.

"By pioneering this new service we are complementing our telecoms family and cementing Tesco's position as a leader in telecoms retailing."

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