You are here: Home - Household Bills - News -

Millions of BT customers to see monthly bills drop by £5

0
Written by:
28/02/2017
More than two million people who buy landline telephone services from BT are set to see their monthly bills cut by at least £5 under plans announced by telecoms regulator Ofcom.

Ofcom found landline-only customers, who are often elderly or vulnerable people and who have remained with the same landline provider for decades, are getting poor value for money.

These customers buy landline-only service either because they do not want broadband or pay TV, or because they take these services under separate contracts from different companies.

Major providers have increased their line rental charges significantly in recent years – by between 25% and 49% in real terms, Ofcom said.

This is despite a 26% fall in the underlying wholesale cost of providing a landline service.

What are Ofcom’s plans?

Ofcom intends to give customers with standalone landline contracts additional protection by cutting the cost of BT’s line rental by at least £5 per month – or £60 per year.

This would mean BT customers with only a landline, who currently pay £18.99 per month for line rental, would pay no more than £13.99 – a reduction of at least 26%.

The planned price cut would not apply to customers buying bundle services including broadband.

The cut would return the cost of line rental to 2009 levels in real terms, effectively reversing price hikes for landline-only customers.

The regulator is also proposing safeguards to prevent BT from making future increases to line rental and landline call costs by more than inflation.

Sharon White, Ofcom chief executive, 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.”

BT’s monopoly

According to Ofcom, almost 80% of the UK’s 2.9 million landline-only customers are with BT. Ofcom said BT’s market power has allowed it to increase prices “without much risk of losing customers”. Other providers have then followed BT’s pricing lead.

Ofcom said it expects other providers to reduce prices on the back of BT’s price cuts.

In a statement, BT said:  “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.”

 

landline

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2293286-vodafone-oxford-street
ISA shares and funds: what are investors buying?

ISA investors have been buying high yielding shares and overseas funds this year, according to analysis by The Share Centre.

Close