Downwardly mobile prices : 3 mobile network

THE first shot in the battle to revolutionise the cost of making international calls was fired last week. But the company behind it may not have realised the ramifications of doing so. Mobile phone group 3 launched a handset which allows users to make free international calls, thanks to its tie-up with VOIP (Voice Over the Internet Protocol) company Skype. This should inject some desperately needed competition, and with luck will trigger innovations which will slash the cost of international calls.

3 mobile phones have been playing up the benefits for groups of friends in the UK to talk for free if they all sign up for the new handset (£49.99 and then a minimum of £12 per month pay as you go), although many networks already offer friends free calls. But by adding Skype technology to handsets which went on sale on Friday, 3 has opened up the possibility of virtually unlimited free calls between millions of people globally.

Many home phone companies, including British Telecom and Talk Talk, offer free or discounted calls to certain overseas countries. Where the new 3 deal has the edge, though, is in allowing free calls overseas while users are out and about.

The potential savings for mobile users while overseas are considerable. Even allowing for the price cap imposed by the European Parliament on so-called roaming charges at the end of the summer, which has reduced costs by 60%, using a mobile overseas is expensive. Calling home from France costs 38p a minute with Vodafone and Orange, and 35p a minute with O2, while calling the UK from the US costs £1.30 a minute with Orange, £1.25 with Vodafone and 99p with O2.

Source : http://business.scotsman.com