BT and Carphone Warehouse are set to go head to head in the fixed line call market. Carphone Warehouse is eager to beat BT's tariffs but BT has accused its rival of confusing and misleading consumers in the process. As the two companies scrap it out, the increased competition means cheaper call rates and more choice for consumers.

As speculation continues over Carphone Warehouse's possible acquisition of the German business of Hutchison Telecommunications, the UK phone retailer has become embroiled in a PR wrangle with BT.

Carphone Warehouse has promised GBP500 to any BT customer that switches to its fixed line telephone service and finds they are paying more than they did through BT.

BT meanwhile has insisted that Carphone Warehouse's cheaper calls claim does not take into account its latest tariff reductions. The company launched its new BT Together options on Sunday and claims that Carphone Warehouse's challenge will exclude these customers from the deal. Carphone Warehouse refutes this and insists it applies to all tariffs including the new ones.

BT has also criticized the small print in Carphone Warehouse's customer challenge for including a minimum spending requirement of GBP12 a month. BT also points out that the GBP500 would only be credited to phone bills and must be used within 12 months. If customers wanted to claim cash instead, they would in fact be given GBP150. BT has claimed that all of this will "confuse and mislead" customers.

All this comes at a time when Carphone Warehouse is trying to become a serious rival to BT. It has unveiled a tariff plan of a maximum of 5.5p for off-peak calls up to 70 minutes in anticipation of BT's maximum 6p charge for off-peak calls lasting up to an hour.

BT is obviously worried by the competition. Its consumer division director Angus Porter said that BT's survival in fixed line is a matter of "life and death" while "for the new entrants it's just an experiment".

The increased competition in the fixed line call market can only be good news for the customer as the battle between BT and Carphone Warehouse will mean cheaper calls and more choice.

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