Tesco marks ambitious entry into VoIP market |
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Fri, 20 Jan 2006 14:00
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LONDON - Britain's leading supermarket Tesco PLC has entered the rapidly growing Internet telephony market by announcing an internet-based phone service that can function as an additional phone line. Tesco's product is a handset that can be hooked up to a computer and users can start making calls after downloading the appropriate software.
Tesco, which has expanded its horizon beyond the food sector, said that this particular service will be made available for less than £20. Tesco added that it would slash the rates to "rock-bottom prices compared to existing fixed-line services."
But currently Tesco's prices are a bit high when compared to Skype's prices. A call from Tesco's VoIP to UK landlines will cost 2 pence (3.5 cents), but a similar call from Skype's service costs just 2.1 cents per minute.
Calls to UK mobiles cost 25.12 cents per minute on Skype, while it costs 17.57 cents per minute from Tesco's service. But the supermarket giant denied that it was competing with Skype, "Our focus isn't to compete with Skype," said Alex Freudmann, the commercial manager at Tesco Telecoms. "We're launching the service because our customers expressed a need. Our customers wanted a simple pricing structure.
Our VoIP pricing is in whole pennies--the halfpenny doesn't exist any more--and there's one call rate at all times." Tesco will not be able to guarantee the quality of the service since it beams over the "public Internet", but the supermarket said that the quality offered at present was equivalent to what is available on the fixed-line. "Assuming you have a reasonable phone, the sound quality is better than a landline," Freudmann said. "We tested the service in customer test groups and had favorable results.
We minimized the data feed--it's compressed as much as possible. It even works very well over narrowband." Consumers will initially need to buy a $35.10 pack, which includes a call voucher worth $8.79 and a USB handset. Tesco shares fell 1.75 pence to 313.25 pence in the backdrop of this news.
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