UK retailer launches Freshtel-based VoIP

Stuart Corner
Monday, 23 January 2006 08:15

Business IT - Technology

The UK's largest retail chain, Tesco, has launched a VoIP service developed in conjunction with Australian VoIP technology and services company, Freshtel, under an agreement announced last June.

Separately, under a deal announced on 29 December 2005, Tesco has purchased a six percent stake in Freshtel Holdings.

Tesco is already in the telecoms business, offering mobile, domestic fixed line and Internet access services. Tesco Mobile has a million customers and entered the broadband internet access market in August 2004.

Mark Main, a senior analyst with market research company Ovum, commented: "This will not be a big money-spinner for Tesco so we can only presume that, in common with numerous other new providers, it is testing the water to understand more about the market and to establish a presence."

According to Ovum, for £20 (approximately $A47) customers receive a USB handset, a PC phone client and £5 (approximately $A12) of calling credit. Calls to UK landlines and many international destinations cost 2p ($A0.05) per minute and calls to UK mobile phone cost 10p ($A0.24) per minute. Customers can select a UK geographic phone number on sign-up.

Main concluded: "Tesco's pricing is simple but not particularly cheap - better offers can be found from other VoIP providers (including BT themselves for certain types of phone call) so we would expect Tesco to have a longer-term pricing strategy in mind. Other traditional phone service providers can also offer better value for money for some types of call."