Tesco will target customers with a voice over Internet Protocol, or VoIP, service, which it plans to start offering from more than 350 stores over the coming months.
The company says call rates will be “slashed to rock-bottom prices compared to existing fixed-line services.”
However, Tesco’s landline prices do not appear to compare favorably with VoIP provider Skype Technologies’ offerings. Calls to U.K. landlines using Tesco’s VoIP product will cost 2 pence (3.5 U.S. cents) per minute, while customers of eBay’s Skype are currently charged 2.1 cents per minute when they call U.K. landlines.
Calls to mobile phones are, however, a different story. Skype charges users 25.12 cents per minute to all U.K. networks, while Tesco offers rates of 17.57 cents.
Tesco claimed to not be in competition with Skype but rather that it is responding to demand from its customers.