Business

BT to cut landline costs for up to one million people

BT Bill

BT will slash costs for customers who only have a landline, after a review by regulator Ofcom.

From April 2018, the telecoms company will reduce the price of its monthly line rental by £7, a 37% decrease from the current cost of £18.99.

The reduction will save up to a million households £84 a year, and customers will have their rental costs capped at the rate of inflation.

Ofcom expects three other providers to follow suit.

Nearly two-thirds of BT customers with only a landline are over 65 and more than three-quarters have never switched provider, the regulator said.

Ofcom said they had been getting poor value for money in recent years, compared to those who buy bundles of landline, broadband and/or pay-TV services.

Phone bills 'soar'

BT said it welcomed "a balanced voluntary agreement with Ofcom" and that it had "listened to the concerns of our line-only customers".

Two other providers have increased their rental charges by even more than BT.

According to Ofcom, both Sky and Virgin Media have put up their charges by 47% above the rate of inflation since 2009.

At the same time the wholesale cost of providing the service has actually fallen by 27% in real terms.

Image copyright Getty Images

"For many people, their landline is their lifeline," said Jonathan Oxley, Ofcom's competition group director.

"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 other firms that provide landline-only deals, Virgin Media, Sky and the Post Office, have not yet commentated on whether they will reduce their charges.

However Virgin Media said it had already frozen rental charges for elderly and disabled customers at £17.99 a month.

The Post Office said it would look again at the issue.

Talk Talk withdrew from that part of the market, to concentrate on broadband and phone bundles.

Age UK said it was disappointed that BT had to be prompted to cut charges by the regulator.

"We welcome the reduced tariffs, but we do find it disappointing that it has taken the intervention from Ofcom for this to happen," said Caroline Abrahams, charity director at Age UK.

Ofcom also said it wanted to help those who buy a phone service from one provider and broadband from another.