BT customers to see bills reduced by at least £5 under Ofcom proposals
BT customers will see their landline-only bills cut by at least £5 a month, according to new plans published by communications watchdog Ofcom.
The regulator conducted a review of the landline-only market, announced in December last year, and found that customers on such contracts – who are often elderly or vulnerable people who have remained with the same landline provider for decades – are "getting poor value for money in a market that is not serving them well enough".
Ofcom's findings showed that of those with a landline-only contract, 43 per cent were aged 75 plus (Source: Ofcom)
According to Ofcom, landline-only customers are particularly affected by price hikes in telephone line rental, with major providers increasing their line rental charges significantly in recent years by between 25 per cent and 49 per cent in real terms – despite providers benefiting from around a 26 per cent fall in the underlying wholesale cost of providing a landline service.
(Source: Ofcom)
Meanwhile, almost 80 per cent (2.3m) of the UK’s 2.9m landline-only customers are with BT. Ofcom said BT’s market power has "allowed it to increase prices without much risk of losing customers" and other providers have then followed BT’s pricing lead.
"We expect that our proposed cut in BT’s prices would lead to other providers following suit and reducing theirs. This would mean savings for landline-only customers across the market," the regulator said.
"Line rental has been going up, even as providers’ costs come down," said Ofcom chief Sharon White.
"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."