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Last Updated: Sunday, 21 March, 2004, 14:12 GMT
Telecom firm 'declares war on BT'
mobile phone
Carphone's move looks set to start a price war
Carphone Warehouse is to offer households free local calls, challenging the dominance of BT in the fixed line market, reports say.

The offer will be made to users of the firm's TalkTalk fixed line service, the Sunday Times and Telegraph reported.

The move is seen as a bid to eat into BT's dominant 70% share of the market.

A spokeswoman at the firm declined to comment on the reports, but did say the firm will be holding a press conference on Thursday.

The Sunday Telegraph added that Carphone Warehouse will announce the move as it unveils a new advertising campaign.

The push to attract more TalkTalk customers could be viewed as direct snub to BT - the newspaper said it is to be fronted by Maureen Lipman the former face of BT.


Meanwhile, the firm is also expected to announce it has hit targets of attracting 400,000 customers to the service - and raise its target to one million.

Regulatory changes to the telecom market in 2002 allowed firms such as Carphone Warehouse to compete with BT in the fixed-line market.

The switch made it easier for people to move to rival services, which meant customers no longer had to key in a code before each call or fit another box to their existing phone socket.

And despite Carphone Warehouse losing money on the free calls, it will still make money from TalkTalk by charging for national, international and mobile calls.

Experts say the move illustrates further confidence among the group's executives in the TalkTalk service provided by Opal, which the group bought for 65m last year.

Shares in the London-based firm have more than doubled in the past 12 months, closing at 139.75p on Friday, and news of the offer could lift them further.

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