THE POST OFFICE is preparing to relaunch its assault on the home phone market. The group, which runs its service over the network of Cable & Wireless, is understood to be preparing to unveil a range of new tariffs and packages as it seeks to contend with the growing competition in the fixed-line market.

It has also been weighing up a move into internet broadband, which could feature as part of the revamped offering.

Analysts are sceptical about its chance of meeting its self-imposed target of securing a million customers by 2007. The Post Office entered the fixed-line telecoms market last year, going head to head with BT, its former sister business. However, since then competition has become even more fierce with big, well-resourced players such as Carphone Warehouse, BSkyB and Orange making aggressive pitches for customers with “bundled” packages of communications services involving “free” broadband.

The most recently released figures from the Post Office at the end of March showed that so far it had picked up just 260,000 customers for its HomePhone service.

The group has suffered some problems with its billing system, which has led to some customers not being charged correctly. And while it has a wide retail outlet network, smaller post offices are being threatened with closures.

Ian Watt, an analyst at Enders Analysis, said that although the group had enjoyed good “traction” in its early phases with its existing customers, its strategy going forward was unclear. “It has made good progress through shrewd marketing to its customers, but it is difficult to see where it goes from here,” he said.

Times Recommends

• US stocks fall below 9,000 mark
• House price fall smallest in seven months
• Wary investors opt to keep cash in safes