BT triggered a fresh price war in the home-phone market yesterday when it slashed call prices on two key packages.

The country’s dominant landline provider is to offer free weekend and evening calls, for a year, to customers joining its ‘Option 2’ package for 18 months.

The monthly tariff on the package - which applies in addition to the monthy line rental charge - is also to be cut by 50p to £3.45.

The monthly charge on BT’s ‘Option 3’ package is also to be cut by £2 to £7.95 from £9.95 a month.

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• BT to spark landline price war

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Comment: Urgent call

BT will have to stay on it's toes in the tough new world of convergence

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However the cost of daytime calls on Option 1 and 2 will increase to 3.25p a minute, up from 3p a minute.

The connection fee on daytime calls will also increase from 3p to 6p, the group said,

The cuts are expected to force a response from BT’s rivals including Carphone Warehouse’s TalkTalk.

It follows a decision by Ofcom, the regulator, last July, to give BT more freedom on its rates for home phone calls. Previously the former monopoly had been restricted on the level of call price reductions it could make.

BT is using its new-found freedom to seek to stem its losses of land-line customers.

After four years of decline the group saw its number of active consumer voice customers jump by 37,000 in the third quarter of last year. The number declined again though in the fourth-quarter.

The group hopes today’s cuts - which follow a set of previous reductions last August - will help it to woo back people who have left.

Next week Carphone Warehouse will report its full-year figures.

It is expected to show that it is closing the gap on Virgin Media, the cable operator, in broadband and that it is transferring customers more quickly from a resold BT product to its own unbundled network at a much faster rate.

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