Easymobile and Fresh cut prices

Easymobile is backed by Danish telecoms operator TDC

New UK no-frills mobile phone service Easymobile has cut the cost of calls and texts retrospectively, back to the day of its launch a week ago.

It cut prices to 6 pence a minute for national calls and 2p for texts.

The firm said it had "eliminated or reduced" most of the charges and fees it says rival Virgin Mobile had alleged would stop it winning over customers.

Fresh, the brand of Carphone Warehouse, has now also cut its prices, to 5 pence a minute for UK pre-paid calls.

It will also charge just 1.7 pence for all mobile text messages.

We have made a commitment to customers that Fresh will always be the price leader and we are honouring that commitment Charles Dunstone, Carphone Warehouse

Easymobile plans to keep costs low by only selling its service over the internet and by not subsidising sales of handsets.

It is a partnership between Danish telecoms operator TDC and Easygroup, founded by Stelios Haji-Ioannou. The plan is to roll the service out to 11 other European countries.

In the UK, Easymobile rents airtime from T-Mobile to provide its service.

Following its launch on Thursday, 10 March, Virgin Mobile had accused the group of hiding "consumer gotchas" in the small print.

'Charges gone'

"We knew all along that our entry into the UK market would be met by well prepared competitors ready to fight for their market share, but we have been surprised that Virgin Mobile - a very large listed company - would react in a way you can only characterise as panic," said Easymobile chief executive Frank Rasmussen.

"With retrospective effect from our launch date, we have eliminated or reduced most of the charges and fees Virgin Mobile believes will limit our ability to win over Virgin customers.

"The battle does not stop here - we also increase our introduction offer, by offering 60% discount on our normal prices."

The announcement brought a reaction from Carphone Warehouse chief executive Charles Dunstone.

"We have made a commitment to customers that Fresh will always be the price leader and we are honouring that commitment," he said in a statement.