Tesco offers unlimited VoIP calls

Tesco is hoping to rival traditional landline services

Tesco is to offer its customers unlimited internet phone calls for a fixed monthly fee, in a bid to rival standard landline service.

The basic package will offer Voice-over-IP (VoiP) calls within the UK for £5 a month. An expanded deal offering international calls will also be available at a monthly rate of £8.50.

A selection of "add-on" options will cater for users who make regular VoiP calls to mobiles or to specific foreign countries, Tesco said.

The supermarket chain hopes that the new service will compete with existing landline services.

“Since launching Tesco internet phone, we have already helped to drastically cut the cost of making UK and international calls and made internet calls the norm for many Brits," said Andy Dewhurst, chief executive officer of Tesco Telecoms.

"These new prices are a simple way for anyone with internet access to make really great value or free calls at any time."

Tesco is also selling a range of internet phones to accompany the service, including a memory stick device that can effectively serve as a portable UK number.