Sugar seeks a broadband tie-up

AMSTRAD is looking to launch a phone product that large telecom companies could sell on to customers as part of their home broadband packages.

The new gadget is understood to be in the final stages of development and will use video technology developed for Amstrad's existing e-m@iler home phone product.

The upcoming device is currently being 'punted round to the big telcos' according to one industry source.

The new product will sit alongside home computers, and Amstrad is planning to persuade the big telecoms companies to offer it as an 'add-on' to broadband packages being provided for home computer users.

This arrrangement would give Amstrad - run by the father-and-son team of chairman Sir Alan Sugar and commercial director Simon Sugar - a steady revenue stream.

Amstrad has suffered recently from slower-than-expected sales of its fixed line e-m@iler home phone product, and last month halved the price of its latest e-@mailer to £49.99 to boost sales.

It is thought the new phone will work in conjunction with a cordless wi-fi base station, with calls connected using an existing home broadband internet connection. BT has already announced plans for a similar product, dubbed project Bluephone, but it has yet to be launched.

Sir Alan uses his company's e-m@iler to yell orders to the 14 contenders who competed for a £100,000 job with the firm in the hit BBC TV reality show The Apprentice, in which he stars.

Amstrad group sales soared to £63.5m in the six months to 31 December from £29.5m last time, doubling profits to £14.2m. But City jitters over the long-term success of the e-m@iler, which was first launched in 2000, have sent its shares tumbling from 220p last September to 136½p, a 12-month low.