Tesco enters VoIP business

 

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By Steve Malone

Posted on 20 Jan 2006 at 10:28

Supermarket giant Tesco has moved into the VoIP business to try and kick start the mass market for Internet telephony. The company has begun to sell a handset able to make calls across the Internet for just £19.97.

Andy Dewhurst, chief executive officer of Tesco Telecoms said, 'People will see this as a pay as you go landline. It will become a service rather than a gizmo.'

The price includes five pounds free airtime bundled with the package, and customers can plug the unit into a standard computer with a broadband connection. They are able to choose their own number during setup, which is portable. By choosing their own area code they can either move their phone to a posher address or, if their calls are mainly to another city, they can choose to locate their numbers there to take advantage of local call rates.

Once installed customers can make free calls to other Tesco Internet phone users. Calls to UK landlines cost 2p a minute and 10p a minute to mobiles in the UK at any time and on any network. International calls to countries such as China, Ireland, the USA and Canada also cost 2p per minute although calls to many other countries cost considerably more.

Tesco is not the first high street name to try to get into the domestic VoIP market. Last September, the Dixons Group launched its FreeTalk service. However, the move by Dixons has not caught the imagination of the public in the same way the FreeServe ISP business did, as the configuration issues with Firewalls may put many people off. Also, the real savings are to be made to international numbers which is not a large proportion of most home users' bills.

By comparison the FreeTalk service also looks expensive. The basic unit (without a handset) costs £79.99 for the set up cost and one year's subscription, which includes free unlimited calls to UK landlines for a year. After the first year, customers will be charged £6.99 per month for unlimited calls to any landline in the UK.

Unlike the Freetalk adaptors, the Tesco sets can only be plugged into a USB port so the PC - Macs are supported - has to be on 24 hours to receive calls.

Tesco is rolling out the handsets across 350 of its stores in the coming months and they are available to buy online. The company is also promising that a range of different handsets for the VoIP market will become available.