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Fri, 22 Aug 2008

Asda has slashed the cost of its mobile phone tariffs in an attempt to become the cheapest pay-as-you-go (PAYG) mobile phone operator in the UK .

The Wal-Mart owned retailer giant has extended the supermarket price wars to mobile phones by announcing a 50 per cent reduction in its flat-rate calls, from 16p to 8p, while the price of sending text messages will also drop from 5p to 4p, starting from September 1.

Asda Mobile, which boasts around 150,000 UK customers, claims it can save the average consumer "at least £53 per year"’, in response to reports earlier this week by Ofcom that the average UK mobile user spends £17.59 per month.

The reductions follow the introduction of a mobile phone package this month by Swedish furniture Ikea . Only members of the retailer’s loyalty card scheme are entitled to the package, which charges 9p per minute for calls .

Analysts claim that supermarkets use cheap mobile phone offers to to increase customer loyalty and lure new customers into their stores rather than to make more money, so they are willing to charge less in return.

Craig Thirkell, buying manager for Asda Mobile, commented: "We’ve been working on this phone offer since we saw the downturn in the economy . We wanted to offer a transparent tariff with no hidden costs as customers are strapped for cash ."

According to price comparison website uSwitch.com, Asda’s claim to offer the cheapest flat rate in Britain is genuine, although comparing tariffs has become notoriously hard due to the complicated deals involving free minutes and texts .

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