UK: Asda halves it’s PAYG prices

Asda has made the next step in the supermarket prices wars by halving (yes, that’s right) it’s PAYG charges, as some of the more traditional rivals are raising theirs.

The supermarket group said that it would cut its flat-rate calls from 16p to 8p, with the price of texts falling from 5p to 4p, from September 1.

Asda has about 150K mobile customers, and is now claiming to be the cheapest Operator in the UK, which was a title previously held by Ikea. As mentioned previously, supermarkets are busy stripping their prices back, but the MNOs are actually raising theirs – tariff rises have been seen on O2 (NYSE: TEF), T-Mobile (NYSE: DT), and Orange, with Vodafone (NYSE: VOD) increasing theirs soon.

The supermarkets and suchlike are in this game for a loyalty kick-back with customers, whereas MNOs are under fire to try and plug the drop in earnings from recent issues such as the regulators capping prices.

It’s not just Mobile costs that the likes of Asda, Tesco and Sainsbury’s are cutting – core foods such as milk have also seen their prices dropped, to try and lure cash-strapped customers. But Asda is still going to have to go some on the Mobile side, if it wants to catch the UK’s biggest MVNO, which is Virgin Mobile – it has around 435K customers.

[Via: Times Online]