Supermarket giant Tesco is expanding its telecoms portfolio into the Internet telephony market, the company announced on Thursday.
Tesco will target customers with a VoIP servioce, which it plans to start offering from over 350 stores over the coming months.
The company claims calls rates will be "slashed to rock-bottom prices compared to existing fixed line services."
However, Tesco's landline prices do not appear to compare favourably with VoIP provider Skype. Calls to UK landlines using Tesco's VoIP product will cost 2p per minute, while Skype customers are currently charged 1.2p per minute when they call a UK landlines.
Mobiles are, however, a different story. Skype charges users 14.3p per minute to all networks, while Tesco offers rates of 10p.
Tesco claimed to not be in competition with Skype, and said it was responding to demand from its customers.
"Our focus isn't to compete with Skype," said Alex Freudmann, commercial manager for Tesco Telecoms. "We're launching the service because our customers expressed a need. Our customers wanted a simple pricing structure. Our VoIP pricing is in whole pennies — the halfpenny doesn't exist any more — and there's one call rate at all times."
"We focused very heavily on giving customers what they asked for, and kept the installation and the tariff simple, and good value," said Freudmann.
Because Tesco's VoIP traffic will travel over the public Internet, it won't be able to guarantee the quality of service. However, the company claims that the quality will be better than traditional fixed line telephony, because of the data compression rates it uses.
"Assuming you have a reasonable phone, the sound quality is better than a landline. We tested the service in customer test groups, and had favourable results. We minimised the data feed — it's compressed as much as possible. It even works very well over narrowband," said Freudmann.
To access the service consumers will need to buy a pack from Tesco store that will cost £19.97, including a £5 call voucher and a USB handset. The pack also gives the user a phone number that non-VoIP users can call them on.
Tesco is also investigating using a VoIP service internally.
Talkback
But I only pay 1p per minute for calls to America and many other places using my landline and a "prefix number" company, Telediscount. I only pay 2p a minute for UK calls.
Tesco - you got to do better than that, much better.
i was impressed with my tesco voip phone
but disatified with tesco staff as none seem to know about the product .what its for or how it works ,i came across the product in my main wisbech store 2 unit for £30 GOOD VALUE AS YOU ALSO GET A VOUCHER
£ 5.00 WITH EACH UNIT this makes them
£10 each now give one to the mother in law shell haunt you forever at no charge to her at all ,as its free to another tesco unit ,but if you mother live the other side of the country well same aplies but youll save a lot of money .its a pitty the branches did not have any litriture on the product as the only way to find out was to open it , so you have to purchuse it first . there was a lot of missing information i would have liked ....is it any cheaper to phone a tesco mobile ? can this product be used in ireland or any of the outher uk countries or southern ireland ,,? is it free to other skype user not on tesco network ,,also found that when you use the unit you loose your sound setup as it is transfered to the phone not the speaker this might just be a setting error bur if not this will mean that you cant leave it pemantly connected if you want to do other things itunes video or any other thing if tesco has any answer to any one questio can they set up a query site or make a link that will take you there
If you change your audio settings in windows back to your speakers, skype has an option in its preferences page to allow you to tell skype which device to use, (ie, windows default, AC97, USB Audio) and you'd select USB Audio for both of them, you still have your music or whatever coming from your speakers, but all skype sounds will come from your phone.