BT landline-only customers set to get £5 off monthly bills

BT landline-only customers set to get £5 off monthly bills

Customers who only buy landline services from BT are set to get at least £5 a month taken off their bills under plans set out by the telecoms regulator, Ofcom. It said those customers, who are often elderly or vulnerable, were not getting value for money. BT has nearly 80% of the UK landline market, and Ofcom is hoping other providers will also cut prices. The telecoms giant said it took its responsibilities “very seriously”. Unlike other companies, they have many customers on special tariffs for socially excluded or vulnerable customers.

Recently, they have frozen the cost of line rental for all of their  customers who take a BT phone line. The planned price cut will effectively reverse cost rises seen in recent years, Ofcom said. BT customers, who pay £18.99 per month for a landline-only contract, would pay no more than £13.99. Ofcom has the power to set prices for firms that have significant market power.
Media captionOfcom tells Radio 4’s Today of its plans to force BT to cut landline bills by at least £5 a month

It is believed that there are about two million elderly and vulnerable [BT customers] – strikingly about half are in their late seventies – and for this group of people their landline is their lifeline. It’s a group of people who have seen the cost of their landline bills rise by about a third in recent years, while BT’s costs have fallen by about a quarter.

Most people on bundled packages – which include landline, broadband and/or pay TV – can shop around for better deals.

BT is not alone in raising its prices. Major industry players increased line rental prices by between 25% and 49% in real terms between December 2009 and December 2016, while wholesale prices fell by about 26%, Ofcom said. The regulator launched its review of landline phone prices in December.

The group of consumers affected are “the most reliant on voice-only services and least likely to leave BT for a better deal”. The demographic tend not to be online, and are the least likely to engage with the market and switch their services, and it is right Ofcom is looking closely at what can be done.

While the price reduction would be welcome for landline-only customers, a lot hinges on whether those who buy bundles will just end up subsidising those who buy standalone products.