After launching a review of landline phone prices last December, Ofcom plan to make BT take at least £5 off the monthly bill for its landline-only customers.
Ofcom argue landline-only customers are often elderly or vulnerable.
“We have found that these customers […] are getting poor value for money in a market that is not serving them well enough,” the watchdog pointed out in a statement, adding it was also proposing safeguards to prevent BT from making future increases to line rental and landline call costs by more than inflation.
Under the plan, these customers would see their bill fall from £18.99 per month to £13.99.
Whilst BT has nearly 80% of the UK landline market, it is not alone in raising its prices. Major industry players have increased line rental prices by between 25% and 49% in real terms in recent years, while wholesale prices have fallen by about 26%, according to Ofcom.
Already under pressure from Ofcom regarding its network division Openreach, the telecoms watchdog would like BT to trial different approaches for communicating with its landline-only customers. The purpose of this would be to help them better understand what they are paying for and how other BT packages, or even other providers, might offer better value for money.
The regulator’s chief executive, Sharon White, told the BBC: “We believe 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.”
She said most people on bundled packages – which include landline, broadband and/or pay TV – are able to shop around for better deals.
Following the release of this statement, BT’s share prices fell into the red. The telecoms giant’s shares have lost nearly a third of their value over the past year, down by some 10 percent in the year-to-date.
BT said it took its responsibilities “very seriously”.
“Unlike other companies, [we] have many customers on special tariffs for socially excluded or vulnerable customers,” BT said.
“Recently, we have frozen the cost of line rental for all of our customers who take a BT phone line.”
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