Argos adds cut-rate phone calls to its product range

Argos, the high street catalogue retailer, is moving into telecommunications by joining the growing band of companies offering BT land line customers cut-price calls.

The Great Universal Stores subsidiary will go head to head with established players in the discount telecoms market such as the Centrica-owned One.Tel.

Argos's service was announced as a trial investigating the collapse of the Australian arm of One.Tel opened, with evidence given by James Packer, son of media magnate Kerry Packer and the backer of the original venture.

CallSave, the Argos service, promises to cut the cost of national calls by up to 50% and international calls by as much as 83% for users of a BT line. Users keep the same line and phone number and do not have to install any boxes.

The cut-price carriers are able to offer big savings by bulk-purchasing time from telecoms carriers. The service is being provided in partnership with Quip!, a BT-backed company which handles billing and customer service.

Meanwhile, in Sydney, James Packer was forced to defend his role as a director at the failed Australian One.Tel operation, saying his family company's £150m investment in it was a mistake.

Rupert Murdoch's son, Lachlan, was another big investor in the firm and is expected to appear before the court later this year.

At the time of One.Tel's collapse, both said they had been "profoundly misled" about its financial status. It collapsed, owing creditors £250m.

Mr Packer, 34, also described his former school mate and One.Tel founder Jodee Rich as "stupid" for holding on to a multimillion-pound bonus before the company's collapse. Most of yesterday's hearing focused on the payment of almost £3m in performance bonuses to Mr Rich and another founding director of One.Tel, Bradley Keeling, in October 1999.

The payments were not made public until September 2000, and drove down the group's share price.

Mr Packer said he personally apologised to Rupert and Lachlan Murdoch in September 2000 for the "embarrassment the bonus issue had caused for all shareholders". Asked if his decision to invest in the company was a mistake, he said: "With the benefit of hindsight, it really was."

The inquiry is aimed at uncovering any material which may lead to legal action to recover money owed to creditors.