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.”
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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.”