The Royal Mail in the UK has announced that it is to enter the landline phone market with the aim to attract 1 million customers by 2008.

The service will be called HomePhone claims to give users a saving of up to 20 per cent, while providing a single bill for line rental and call charges.

The move however has met with criticism from both BT and the City, believing that the former teleco company won't be able to attract customers in such a demanding market - there are currently over 25 landline based companies offering you discounts on your calls.

Given that the Post Office last dealt with the phone industry some 20 years ago when it was called the GPO.

Of course, the chief executive of the Post Office denies that the service will be a flop.

'Our customers have welcomed the telecoms products we have introduced so far, and they want more. Now the legislation, the technology and the infrastructure are in place,' said Mills.