In what they describe as a challenge to the mobile giants, 3 has launched the cheapest Pay As You Go tariff ever to hit the market.

3's new "Flat 12" tariff offers customers a flat rate of 12p per minute for calls to all mobiles and landlines anytime which apparently undercuts the current cheapest call tariff by 20%.

The new PAYG tariff also includes free voicemail in the UK even when you're not in credit, (3 is the only operator to offer this) and 300 free 3 to 3 user calls per month.

John Penberthy-Smith, marketing director of 3 UK, said: "PAYG customers will no longer be treated as second class citizens with this new 3 tariff. We're undercutting our competitors and giving people more reasons than ever to switch to 3".

3 are offering PAYG customers their choice of any handset in the range which includes the latest and greatest handsets from Nokia, Sony Ericsson and LG.