Ofcom rules that BT will have to start charging its customers less

Are you with BT for your landline service? In that case, prepare yourself for some good news, because the bill for your line rental could be due for a reduction to the tune of at least £5 per month, possibly more – providing you’ve subscribed for just the landline (as opposed to a bundle of other products such as broadband and TV).

This is Ofcom’s freshly announced plan, with the watchdog believing that those who only have a landline are being asked to fork out an unfair amount for their monthly rental fee.

Ofcom is proposing that those who pay £18.99 every month for their line rental at the moment will see a reduction to a maximum of £13.99. The watchdog said that it’s looking at such a cut of at least £5, but it could be as much as £7 for an £84 annual saving (depending on the feedback it receives from interested parties during its review of landline pricing).

Ofcom noted that the price of landline rental has risen rapidly despite falling wholesale costs, and that this represented ‘poor value for money’ for landline-only customers, many of whom are often ‘elderly or vulnerable people’ who have been with the same phone provider for decades.

Statistics show that the wholesale price of landline provision has seen a 26% drop over the past decade or so, whereas landline rental costs have gone in the other direction and risen by between 25% and 49% in real terms.

Turning back the clock

The proposed £5 price cut would effectively return line rental costs to the same level as 2009 in real terms, which the watchdog believes is the fair and right thing to do.

In total, this will affect some 2.3 million BT customers who are landline-only – the vast majority of the total of 2.9 million landline-only subscribers in the UK. Ofcom further observes that BT’s price cut would likely force the hand of other providers to also decrease their tariffs in order to stay competitive.

Sharon White, CEO of Ofcom, commented : “Line rental has been going up, even as providers’ costs come down. This hurts people who rely on their landline the most, and are less likely to shop around for a better deal. We think that’s unacceptable.

“So we plan to cut BT’s charge for customers who take only a landline, to ensure that vulnerable customers get the value they deserve.”

BT defended itself by telling the BBC : “Unlike other companies, [we] have many customers on special tariffs for socially excluded or vulnerable customers. Recently, we have frozen the cost of line rental for all of our customers who take a BT phone line.”

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