Supermarkets extend battle to mobile offers
LONDON - The supermarket price war has spilled over into the mobile phone market as Asda and Tesco trade claims and counter-claims about the price of calls and texts for their pay-as-you-go (PAYG) customers.
Asda, which partners Vodafone, sparked anger in Tesco ranks last week when it halved its charges and claimed to be the cheapest PAYG operator in the UK. It said that at 8p a minute it offered the best option for customers. However, Tesco, which partners O2, argued that its rival has not taken into account the overall value of its own packages, which offer features such as fixed-rate calls and texts to a customer's favourite numbers.
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Mobile services from Asda, Tesco, and home-furnishings chain IKEA, which recently partnered T-Mobile, are now among the UK's top five cheapest options for standard PAYG call and text services.
While retailers have been undercutting each other to win a share of Britain's 47m PAYG users, traditional mobile operators are putting up their prices. Vodafone is about to raise its minimum call charge from15p to 20p. O2, T-Mobile and Orange have also increased tariffs for top-up customers.
The supermarket chains are aiming to persuade mobile users to defect, as consumers are becoming more price-conscious and likely to be won over by budget alternatives to the traditional operators.
Asda is to launch a campaign in September to promote its offerings.
Tesco's promotions will concentrate on the overall value of its packages. A spokeswoman said: 'We know it is the overall value of the package, not just the call and text rate, that customers look at when deciding which provider to choose. Our plan helps customers get most out of their monthly top-up.'
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