Tesco is the latest company to realise the potential of VoIP and is launching a service that will allow users who sign-up to make free calls over the Internet.

The supermarket chain is launching an internet phone that offers cheap calls.

Like Skype, the service will be free for all PC to PC calls, but users hoping to phone outside the system will be charged. Calls from Tesco's internet phone both within the UK and to international destinations such as the US, Canada and Australia are priced at just 2p a minute, while calls to UK mobiles cost 10p a minute.

Unlike offering from other companies such as Vonage and new handsets available for Skype from Netgear, the Tesco phone will still need a USB cable connected to the PC to work.

Tesco Internet phone packs are now available to purchase in-store for just £19.97. Each Tesco Internet phone pack contains a phone handset, an installation CD, an installation guide and £5 of free airtime.

According to the supermarket chain 8.1 million homes in the UK now have access to broadband internet.