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BT has cut the cost of its voice over IP (VoIP) service in a bid to make it "better value" for punters.

BT's Broadband Voice product - which was launched in December - lets phone users make calls using a touch-tone telephone. But since it uses their broadband connection (rather than the traditional telephone line) to connect the calls, the UK's dominant fixed line telco reckons the calls are often cheaper.

Now, though, BT has shaved a quid off the cost of its "Evening and Weekend Plan", which has been reduced from £6.50 to £5.50. Its "Anytime Plan" has also been reduced from £14.00 to £13.00 for all BT Broadband customers. And as a special promo, BT Broadband punters signing up before 31 October can get the service for free for three months.

Of course, anyone keen to use the service will still have to pay line rental and cough up £60 for an adaptor.

When BT launched Brioadband Voice last year, it reckoned the service could save punters up to 57 per cent on calls to mobiles and up to 25 per cent on UK daytime calls. All in all, the monster telco said it could save punters more than £100 a year in cheaper phone calls.

At the time, rival cable firm Telewest described the service as little more than "hype", while NTL questioned BT's figures insisting the VoIP service would only save punters a measly 50p a month

Two weeks ago, BT let loose its Communicator VoIP service which offers free PC to PC calls, but which also links back into the telephone network. The product manages phone calls, webcam, emails, texts and instant messaging in one place on a PC, with multi-way video calls expected to be added in 2005.

Elsewhere, retail prices for broadband fell sharply in the first six months of the year. Analysis from broadband research outfit, Point Topic, found that cable operators cut monthly rentals for services by an average of 16 per cent, with DSL operators cut them by 13 per cent in the same period.

Although almost all DSL operators either held or reduced prices, the cable modem market proved to be more dynamic with widespread price falls across the Americas, Asia Pacific and EMEA, said analysts. ®

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