Ofcom tells BT to reduce landline-only prices

Prices should be slashed by £5 per month, says watchdog

Government telecoms watchdog Ofcom is to force BT to cut its charges for landline-only services by at least £5 a month.

The decision follows an Ofcom review which showed that BT's landline-only customers were getting poor value for money largely due to hikes in line rental pricing, while customers of 'bundled' services benefit from "attractive deals driven by strong competition."

The watchdog found that line rental charges have risen by between 25 per cent and 49 per cent in recent years - even though the underlying wholesale cost of providing a landline service has fallen by 26 per cent.

By forcing BT to cut customers' bills by at least £5 per month, or £60 per year, the cost of line rental will be reduced to 2009 levels in real terms. BT customers with only a landline who currently pay £18.99 per month for line rental, would pay no more than £13.99.

Around 2 million subscribers will be affected, often elderly or vulnerable people who have remained with the same landline provider for decades.

Ofcom chief executive, Sharon White, said: "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."

Ofcom added that it will also propose safeguards to prevent BT from making future increases to line rental and landline call costs by more than inflation.

It also wants BT, which provides services for 2.3 of the UK's 2.9 million landline-only customers, to communicate with these customers to help them better understand what they are paying, and how other BT packages - or even other providers - might offer better value for money.

BT says it has taken Ofcom's remarks onboard, but the firm is keen to point out that it is already doing quite a bit for vulnerable customers.

"We will respond to Ofcom's consultation fully when we have considered the detail. We take our responsibilities in this area very seriously and, unlike other companies, have many customers on special tariffs for socially excluded or vulnerable customers, including BT Basic, which still costs just £5.10 a month for line rental and calls, and Home Phone Saver," said a BT spokesperson.

"Recently, we have frozen the cost of line rental for all of our customers who take a BT phone line. We have also been improving the service we provide and customers have benefitted from our multi-million-pound investments in a faster fault repair service, the launch of our free nuisance calls prevention service BT Call Protect and bringing call centre work back from India to the UK."