War it is. Today's announcement by Carphone Warehouse of a £20.99 price tag for its Talk Talk phone service - including free high speed 8Mb broadband access to the internet - is the best thing to happen to telephony for years, writes Victor Keegan.
Forget about the broadband being free because, of course, it isn't. But the cost of the whole package, including free international calls to 28 countries (and also free in UK) undercuts BT's £43.49 by 50% and is well below other competitors such as Bulldog and Wanadoo (at least for the moment until the price war hots up further).
Britain is already the most competitive broadband market place among all G8 countries and this will make it even more so. It is also a giant step towards bridging the digital divide since poorer people paying an £11 a month rental fee to BT won't find it such a big jump to £20.99 because of the free calls included (as long as they live in the 70% of the country covered by the offer).
It is also well timed because broadband is in the throes of delivering television,"wideband audio" and free telephone calls at very low or zero cost. It is a good time to be joining the revolution.
It almost makes me feel sorry for BT because, by the terms of its contract with Ofcom, it can't lower its own prices until it has "unbundled" 1.5 million local loops (the distance from the telephone exchange to your home).
It has only done 300,000 so far. It is this unbundling that has prompted firms like Carphone to leap in and manage their own local loops and charge less. But sympathy for BT has its limits for one simple reason. BT has a virtual monopoly of the telephone delivery system to the home and it could have, should have, done this ages ago.
