Plans are set to reduce by at least £5 per month after Ofcom have reviewed how the market is working for customers who only buy a landline service from a provider.
Landline-only customers of BT are set for line rental prices similar to those in 2009 after Ofcom reviewed how the landline market is performing for landline-only customers.
Ofcom found that those people who have landline-only contracts are often elderly or vulnerable who have stayed on the same landline tariff for decades and are receiving poor value for money as a consequence.
Consumers of just landline services have been affected by the price hikes in telephone line rental which have increased between 25 to 49 per cent in real term despite the providers of line rental seeing a 26 per cent fall in the wholesale cost of providing the service.
Ofcom intends to cut the cost of BT’s line rental by at leas £5 per month which will give customers of standalone landline contracts additional protection and reduce their current price from £18.99 per month to no more than £13.99 per month.
Cable.co.uk consumer telecoms expert Dan Howdle said: “Ofcom has stepped in and done exactly what was needed.
“Our own historical pricing data shows the rise in landline prices have exceeded inflation by a factor of twelve across the last three years alone.
“While it’s true that BT has added some value in terms of nuisance call blocking and other calling features, with the underlying wholesale costs coming down steadily for the last 10 years, these price hikes have become increasingly hard to justify.”
Ofcom found that BT have been increasing it’s landline-only prices as there isn’t a risk of losing customer due to a lack of competition as nearly 80 per cent of the UK’s 2.9 million landline-only customers are with BT in the first place.
The proposition put forward from Ofcom will prevent BT from making future increases to line rental and landline calls cost by more than inflation and is also proposing and seeking views on a cut of £5 to £7 to BT’s landline-only service.
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 and we think that’s acceptable.
“We plan to cut BT’s charge for customers who take only a landline to ensure that vulnerable customers get the value they deserve.”