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The Post Office today returned to the telecoms sector with its HomePhone service. The organisation, which ran the UK's telecoms network until BT was spun out in 1981, is gunning for one in 20 of BT's residential fixed line customers by 2008.

Following in the footsteps of other operators (Tesco, Carphone Warehouse, British Gas, Tele2, to name but a few) the Post Office reckons its service will be up to 20 per cent cheaper than BT as it looks to win one million new customers.

Punters who switch to HomePhone will also only receive one bill for calls and line rental as the Post Office uses Wholesale Line Rental (WLR); this enables it to own the whole customer relationship, delivering a single bill for both calls and line rental.

Cable & Wireless is supplying the infrastructure for the service.

Said chief exec David Mills: "With the launch of Post Office HomePhone we intend to win a significant slice of the residential telephony market. With a combination of line rental and cheaper calls on a single bill we can provide a comprehensive, money-saving service to the residential phone user.

"Our customers have welcomed the telecoms products we have introduced so far, and they want more. Now the legislation, the technology and the infrastructure are in place."

Last week BT was accused of slipping in a "stealth price rise" of up to 110 per cent with three million customers expected to have to pay more for phone calls first thing in the morning. ®

Related stories

Post Office to offer 'me too' telco service
BT sneaks in 'stealth price rise'
BT appoints phone Czar

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