Tesco Talk offers three tariffs and claims to save BT customers up to 30% on home calls.
When a customer registers for the new service, the line is reprogrammed at the exchange so Tesco Talk carries all outbound calls. However customers will continue to receive a line rental bill from BT.
Phone numbers do not change and there is no need to type in a code or plug in a box to the existing phone line. The service also offers Clubcard points.
Sainsbury launched Homephone, a fixed line service in conjunction with the Carphone Warehouse, in June.
Tesco Telecom CEO Andy Dewhurst said: “By switching to Tesco Talk, BT phone users could slash the price of their monthly home phone calls by up to 30%. By providing competition we will encourage customers to look hard at their bills and shop around as they do for things like car insurance.
“Our trial in East Anglia gives us confidence that Tesco can be successful in this market.”