Yahoo and BT have stepped up the ante and announced separate plans to tackle the ever-growing popularity of VoIP company Skype before they are manoeuvred out of the market completely.

BT not content that with wanting to dominate the new emerging broadband television content over broadband market has also set its sights on Skype.

The company has announced that it will be focusing heavily on new broadband and voice services for consumers in the next couple of months.

To kick start the battle against Skype, it has announced that it will be offering free calls throughout the festive holiday to any landline in 30 different countries.

The company has also halved the price of its Broadband Talk package that allows customers to use a normal phone, rather than the PC to £2 per month for evening and weekend calls or £7 a month for anytime calls. With BTs top two Broadband packages, evening and weekend calls are completely free.

BT will also introduce an enhanced voice over internet offering in Spring which will be available globally and feature BT's new high definition sound quality.

This sound quality will also be available on BT's new video phones - also available in Spring.

BT also announced that it will be aggressively using its network of Wi-Fi hotspots across the company to offer innovative opportunities to work and play, such as the recent deal with Nintendo allowing gamers to challenge one another via a Wi-Fi link at BT Openzone hotspots.

Yahoo, also not content with Skype stealing its market share has also announced that it will also undercut Skype by charging just 1-2 cents a minute in 180 countries.

The new version of Yahoo Messenger for text, voice and video communications will be introduced in the next few days.

It will include a similar feature to Skype called 'Phone Out', offering low per-minute charges for calls from computers to landlines, and 'Phone In', offering a low-cost subscription service for phone calls to computer users.

Yahoo will charge 1 cent per minute to Yahoo Messenger users calling the US from anywhere in the world, and 2 cents a minute to 30 other countries including Australia, China, France, Germany, Italy, Japan and Korea.