Tesco launches low-cost international phone card

Tesco is set to enter the international phone calls market with the launch of a global calling card offering low-cost calls to more than 60 countries. The initiative follows research from Simplifydigital which shows that families are wasting millions of pounds a year on international calls by failing to shop around for the best call plans. The research showed that a third of homes have not changed their landline package in more than five years, despite their call plans being costly and unsuitable in many cases. The cost to consumers is expected to rise during the next two months as the number of overseas calls increases hugely as the holiday season approaches – 40% of UK homes are expected to call abroad on Christmas Day alone. Charlie Ponsonby, chief executive of Simplifydigital, said: "We take thousands of calls per month from customers who pay through the nose for international calls that they could get cheaper or even for free. Some families are wasting hundreds of pounds a year as a result." Home phone customers have two basic options when calling internationally: using a conventional home phone service from the likes of BT , TalkTalk or Virgin Media ; or using a VoIP (Voice over Internet Protocol) service, which uses the internet to carry the calls. An increasing number of homes are turning to VoIP solutions – for example from Skype and Vonage – when calling abroad, as they offer low prices and features such as video calls. Conventional call plans using the BT or cable network require customers to pay for line rental costing £7.50 to £13.29 a month. In addition they must subscribe to a suitable call plan. It is families on old "legacy packages" that tend to lose out. Ponsonby said: "Families who regularly make international calls and have not checked the call plan they are on are crazy. They could be pouring £1 coins down the drain every time they call. The key is to find the plan that matches the international destinations you call regularly." Tesco's calling cards, which will be sold in all Tesco stores by the end of the year, will be usable with any landline, mobile phone or payphone, and Tesco claims there are no hidden costs such as daily maintenance fees, rounding up charges or disconnection fees. A 30-minute call to India using the Tesco international calling card will cost 64p, meaning users who call daily would save more than £2,500 a year compared to BT's standard rates, and even more compared to Virgin Media's standard package. Lance Batchelor, chief executive of Tesco Telecoms and Tesco Mobile, said: "Our customers have told us that the calling card market needs to be cleaned up. Consumers want honest, simple prices, convenience and good service. The card allows people the flexibility to call where they want, whenever they want, without the need for a prescriptive bundle or subscription service." Ponsonby added that while the Tesco calling card doesn't offer free calls, it does offer cheap rates to a number of countries not necessarily included in the most popular destinations on many of the home phone call plans available elsewhere in the market. For example, calling India costs only 2p a minute (plus a 4p connection fee) with Tesco compared with SkyTalk's 28p a minute during the day. Tesco estimates that with its £5 calling card, users can make around 225 minutes' worth of calls. Ponsonby said this is a good way to supplement an existing calling plan with another provider if users make a number of calls to locations which are not included in their most popular destinations.