OneTel has cut the cost of operating a landline phone for small businesses by reducing the amount firms mus pay to rent their line.

The new service costs £11.99 a month - 12 per cent cheaper than BT's business line rental charges, says the rival - and means that SMEs can have line rental and call charges on one bill.

The cut in line rental charges is courtesy of wholesale line rental (WLR) which enables telcos to invoice punters for line rental and phone charges on the same bill, as opposed to having to pay for calls (to a telco such as Tele2, Carphone Warehouse or OneTel, for example) and line rental (to BT) separately.

Today's announcement comes just days after BT and Ofcom struck a new regulatory deal designed to open the UK's telecoms sector to greater competition.

As part of that agreement the sector is set to see a spike in interest for WLR as operators try and undercut BT still further. As part of last week's announcement BT said it planned to cut the cost of WLR for retail users.

"The ability to offer line rental is an important step in the creation of a level playing field in the telecoms industry," said OneTel in a statement.

In April OneTel - which is owned by Centrica and services 1.75 million fixed line, mobile and Internet punters - unveiled a home phone service that includes both line rental and call charges in one bill using WLR. ®

Related stories

BT faces fading market share
C&W touts wholesale line rental
BT bows to Ofcom pressure
BT escapes threat of immediate break-up