British Telecom (BT) has been ordered by the telecoms regulator, Ofcom, to reduce its bills by £5 for customers that only subscribe to its landline service. The change is expected to impact two million customers, mainly elderly and vulnerable people who have remained with the company for decades but who are no longer getting value for money, according to Ofcom.
Ofcom chief, Sharon White, said:
“Line rental has been going up, even as providers’ costs come down. 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.”
Figures from Ofcom show that ISPs, in general, have benefited from around a 26% drop in the wholesale cost of providing a landline service; Ofcom decided to go after BT purely because it is the biggest player, with its 80% (2.3 million customers) of the landline-only market. Ofcom blames price increases by BT for the rest of the market following suit with their increases.
BT challenged the regulator by issuing the following comment:
“We take our responsibilities in this area very seriously and, unlike other companies, have many customers of special tariffs for socially excluded or vulnerable customers, including BT Basic, which still costs just £5.10 a month for line rental and calls, and Home Phone Saver…Recently, we have frozen the cost of line rental for all of our customers who take a BT phone line.”
Ofcom is currently running a public consultation process regarding the price cap for landline-only offers. The consultation will run until May 9th after which the regulator will decide if it wants to put a cap of between £5 and £7 on BT’s landline-only service.