BT to cut landline prices following regulatory pressure

26 October 2017
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At least 800,000 BT customers who buy a landline-only telephone service, and who don’t have broadband with BT or any other provider, will see their bills fall following pressure from the telecoms regulator.

From 1 April 2018, BT has agreed to cut line rental prices for these users by £7 a month (£84 a year), taking prices from £18.99 to £11.99.

Ofcom says this 37% reduction will take prices to a similar level to 2009. It first announced its proposals in February

These prices will remain for three years although they can still rise in line with inflation. BT isn’t, however, allowed to increase landline-only costs between now and 1 April 2018.

An additional 200,000 customers with BT’s Home Phone Saver – a telephone-only line rental package that bundles line rental, calls, and additional features together – can choose to stay on their existing package or move to the new standard product being reduced in price.

However, as Home Phone Saver offers a discount of up to £30 a month compared to purchasing the features individually at standard prices, many customers on this tariff could already be on the best deal for them, even after the price of the standard tariff is cut. 

Prices have risen despite wholesale costs falling

Of the UK’s 1.5 million landline-only customers, Ofcom says two thirds are with BT. Ofcom believes this position has allowed BT to increase prices without much risk of losing customers, and other providers have followed BT’s pricing lead.

Ofcom adds that telephone line rental prices have risen, despite wholesale costs falling.

Jonathan Oxley, Ofcom’s competition group director, comments: “For many people, their landline is their lifeline.

“But households who only have a landline – and no broadband – have seen their phone bills soar. Many are elderly, and have been with BT for decades. We’ve been clear that they must get a better deal.”

The regulator adds that it “expects” BT’s £7 price cut to mean other providers can follow suit.

In a statement, BT said: “We welcome a balanced voluntary agreement with Ofcom which means that up to 1 million of our customers who don’t have broadband will receive a substantial cut in the price of their line rental from April 2018.” 

Comments

In reply to by anonymous_stub (not verified)

An interesting ruling. For those BT landline customers who use a Broadband service that has no reliance on BT systems would also benefit from this reduction.This would include Satellite, Fixed Wireless and I guess Virgin cable services too.Good news Ofcom, it is about time independent providers were not penalised in the generally suffocating state funded monopoly of BT.

In reply to by anonymous_stub (not verified)

......and now they are clawing back that price reduction by inflation busting price rises elsewhere.Nice one BT - I'm so pleased that I recently left you..........this time for good!

In reply to by anonymous_stub (not verified)

I don't know how the use or non-use of internet should sffect the price of the landline. If one has internet service, one pays extra for that service, independent of the line charge. What is highlighted here is that BT and all of the other landline providers have hiked their landline charges by far in excess of inflation - if they say that rediucing from £18.99 to £11.99/month is analogous to returning to 2009 price level, that suggests that they have hiked charges by 58% over the past 8 years, which must surely be more than double the rate of inflation. They say they have invested in modernised (fibre) networks, but surely the cost of that has been covered by the much-higher charges for fibre internet. In all fairness, it is time that line rental charges were reduced across the board.

In reply to by anonymous_stub (not verified)

I live in Northern Ireland and I can only have BT phone and broadband because of where I live, half the time my broadband doesn't even work but I pay over the odds for the package. Totally fed up with BT am I going to get any help, no. I have complained several times but nothing ever comes off my bill at the end of the quarter.

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