TELEPHONE customers are likely to reap the benefits of a price war which is looming on the horizon after BT announced yesterday it was slashing fixed-line call costs to beat the competition.

Former British Telecom has introduced a three-part pricing structure for its BT Together scheme in an effort to keep a tighter grip on its 19 million customers.

The company enjoys a 73 per cent market share but faces renewed competition from utility company Centrica which offers telecoms services under the One.Tel brand while the cable companies NTL and Telewest have long offered an alternative to BT.

In a statement, in which BT claimed to be up to 20 times cheaper than its main rivals, the former state-run monopoly announced the end of per-minute charging for all evening and weekend calls.

Additionally, the changes eliminate the different pricing structures for national and local calls.

The shake-up will see BT Together customers pay 6p for up to an hour for all evening and weekend calls made anywhere in the UK.

Angus Porter, managing director of BT Retail's consumer division, said: "Claims by some competitors of savings over BT are often just plain misleading, as they are based on comparisons with our standard rate, which is only for customers for whom it would not be economic to be on a fixed call pack- age.

"Today's changes make it simpler for customers to spot the real deal."

The new pricing structure will be launched on June 1.