Easymobile's distinctive orange branding has led to a legal row

Easymobile will offer voice calls for a flat rate of 15 pence per minute and SMS text messages for 5 pence each.

However, until the end of June, it will charge 9 pence a minute for voice calls and 3 pence for text messages.

The group plans to keep costs low by only selling its service over the internet and by not subsidising sales of handsets.

Colour row

But the launch has not gone without a hitch. Mobile giant Orange has sued the firm over its use of the colour orange.

We have made it our mission to make a difference for customers Frank Rasmussen, Easymobile chief executive

Orange says the new low-cost mobile service has infringed its rights regarding the use of the colour orange and could confuse customers.

But at the launch, Easygroup founder Stelios Haji-Ioannou shrugged off the legal action saying it was a sign that France Telecom-owned Orange was "running scared".

"I have been using this colour for 10 years and I will not stop using it now for anyone. Let the battle commence," he added.

'Hidden charges'

Meanwhile, Virgin Mobile accused the group of hiding "consumer gotchas" in the small print.

While the Easymobile website proclaims it has "no hidden charges" - Virgin pointed out Easy customers are required to spend �5 every three months or face a 75 pence per month charge.

Virgin added that it also costs �9 to replace a SIM card, and customers wishing to leave Easy's service will have to pay a �5 handling charge.

"To claim no hidden fees on one hand, then demand a minimum spend on the other - with a possible monthly fee penalty, even when no calls are made - is hardly the hallmark of a company which is putting the consumer at the heart of its service," Stephen Day, Virgin Mobile's director of corporate affairs, said.

Low-cost scramble

Easy's launch has prompted a number of mobile companies to look into the low-cost arena.

On Wednesday, Vodafone said that, while it had no current plans to do so, it would consider launching low-cost "sub brands" to attract cost-conscious users.

Meanwhile, Carphone Warehouse announced it was halving the cost of calls and texts on its Fresh pre-paid mobile service.

Easymobile chief executive Frank Rasmussen said: "We have made it our mission to make a difference for customers that until now have been hunting for handset offers that have been wrapped into complex tariff plans and incomprehensible long term contracts."

Easymobile is a partnership between Danish telecoms operator TDC and Easygroup. After its UK launch, the plan is to roll the service out to 11 other European countries.

In the UK, Easymobile will rent airtime from T-Mobile to provide its service.