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Examining the Changing Cost of UK Phone Line Rental and its Future

Wednesday, December 30th, 2015 (1:04 am) - Score 6,586
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Home phone lines aren’t as popular as they once were, with consumers increasingly turning to mobile and VoIP (e.g. Skype) alternatives. At the same time ISPs have been gutting free voice call options from related broadband bundles and yet despite all of this the price of line rental continues to soar.

Like it or not every ISP that uses a fixed line service must cover the cost of the underlying physical line and maintenance in some way, although whether or not this service exclusively carries just broadband or also does a phone and or TV service tends to vary.

For example, BT’s traditional telecoms infrastructure is dominated by old copper lines that can deliver both phone and broadband, while Virgin Media’s cable network has a semi-separate line for phone customers. Elsewhere pure fibre optic (FTTH/P) providers normally only offer broadband, often with the option of a VoIP phone solution that can be delivered over the top.

Over the past few years the cost of traditional home phone lines, which are mostly run over BT’s copper network, has gone up from around £10 inc. VAT per month in early 2007 to nearly £18 at the end of 2015 and at this rate we should reach the £20 per month milestone by around 2017/18, which would equate to a price hike of around 100% in the space of a decade (note: during this period VAT fell from 17.5% to 15% in 2008 and then returned to 17.5% in 2010, before jumping to 20% in 2011).

Just take a look at how things have changed with the line rental charge at BT and TalkTalk as two prominent examples (the table below finds an average annual price increase of around 5%). BT in particular is a prime example because most of the biggest ISPs tend to follow by their lead. Take note that Virgin Media’s semi-separate phone lines also follow a nearly identical trend.

BT Talk Talk
2011 = £13.90 2011 = £13.80
2012 = £14.60 (+5.04%) 2012 = £14.50 (+5.07%)
2013 = £15.45 (+5.82%) 2013 = £15.40 (+6.21%)
2014 = £15.99 (+3.5%) 2014 = £15.95 (+3.57%)
2015 (Dec 2014) = £16.99 (+6.25%) 2015 = £16.70 (+4.7%)
2016 (Sep 2015) = £17.99 (+5.89%) 2016 = £17.70 (+5.98%)

NOTE: Some of the prices may have officially been introduced at the end of the previous year, thus for those we attempt to list the year where the price has been dominant for the longest period of time (e.g. BT raised its cost in Dec 2014 to £16.99, but we list this as 2015 because it was in place for most of that year).

Despite all this the actual underlying wholesale cost of basic line rental has held a fairly stable price point of under £10 per month (Basic BT WLR is currently £89.50 +vat per annum) and indeed if anything the rental has actually fallen in price, albeit only by a little, over the past few years.

On top of that most of the major broadband and phone providers (e.g. TalkTalk, Sky, PlusNet) have been quietly removing their value-added extras from entry-level packages, such as free UK evening and or weekend voices calls (these use to be included as standard by most providers), yet once again the price that consumers pay for line rental has continued to rise and at roughly the same pace as it always did.

In short, most consumes are getting less than before and yet they’re paying proportionally more for a service that at the same time seems to be in decline due to the prevalence of mobile and VoIP style services. Some of this change is evident when looking at Ofcom’s breakdown of line rental costs versus voice call revenues.

line rental price vs declining call revenues

Ofcom separately notes that retail fixed voice services generated £2.03bn of revenue in Q4 2014, which is a £6m (0.3%) increase compared to the previous quarter, but it’s also a £56m (2.7%) fall compared to Q4 2013 (BT’s share of these revenues was 46.2%, a decline of 0.8% compared to one year earlier).

However the ever increasing cost of line rental isn’t merely a function for offsetting against the decline of revenue from voice calls.

The Costs of Line Rental

Admittedly the underlying wholesale cost of line rental is only a partial reflection of how things have changed because ISPs also have to add their own costs on top, such as VAT, the need for a fair profit margin, various calling services and of course annual inflationary changes (the rate of increase in prices for goods and services versus previous years). More over the page..

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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21 Responses
  1. SpencerUk

    Aquiss offer line rental on a monthly contract at £13.00 incl VAT
    CloudScape connect offer a 12 month line rental at £12:50 incl VAT

    There’s options there still..Just there’s not many that do unlimited standalone FTTC..

  2. aslam

    RIPOFF Britain paying line rental to have a phone as an ornament so putting the line rental up for dial up broadband . absolute disgrace but saying that its Britain of cowboys .

  3. Captain.Cretin

    I would just like to add that Aquiss havent raised their line rental charges in the two years I have been with them.

    (I hope this doesnt jinx them into doing so).

    It is time OFCOM and ASA stopped the “Broadband for £5” headlines, with the £18 line rental in tiny print on page 100 of the T&Cs.

    The headline price should be the TOTAL price, same as it is for everything else.

  4. gerarda

    One of the consequences of higher line rental and cheap broadband is that it is getting more and more difficult to find inclusive call line rental only packages. I have seen ones where it would be cheaper to take a broadband package and not use the broadband

  5. SO WLR at £7.45 a month and retail at £15 (excl VAT) tells its own story. What value eaxatly is being added to the line?

  6. EthernetMonster123

    I don’t want/use landline anymore, it’s ridiculous! Only a very small percentage of the people that I know still use it. Most have moved to skype, whatsapp and other internet based methods. It’s frustrating that I still have to pay for something that I don’t even use, especially when companies are milking it as much as possible before it fully “dies out” by putting the prices up.

    • Well as the article says, you do still need a physical line for your broadband and so unless you’ve switched to mobile-only then one way or another it will still exist.

    • FibreFred

      If you don’t need a line cease it.

    • EthernetMonster123

      @Mark Sorry I didn’t read the whole article before I commented this. Just ranted. Woops. 😀

      @Fred It’s not possible to cease the phone line right? Even with FTTC?

    • FibreFred

      Exactly my point

      You are renting a line for your broadband and for voice it’s not just for voice. You can’t just get way from having to rent a line.

      I believe bt are looking at offering fttc only (no voice ) but there will still be the rental of a line to pay

  7. It isn’t just the cost of the line rental you have to take into account, it is also the cost per minute ( most are rounded up to the minute)of the calls, the tariffs are often complicated. Plus some suppliers are charging as much as 18 pence ( once round up to the penny feature of some suppliers is applied) just to connect a call of any length. The large ISP’s certainly pull the wool over the eyes of the unsuspecting customers who only see the “Low cost broadband” price which is featured in any adverts.

    Happy New Year all.

  8. Groucho

    Which is why we left TalkTalk. The prices kept increasing, while the service supplied kept shrinking. We have gone to Fuel, which is cheaper, has evenings and weekend calls ‘free’, and the speed has almost doubled. Ironically, when I do a speed test, I see that the line is from Talk Talk!

  9. PeterM

    The phone line rental is the telecoms equivalent of the power industry standing charge.
    I guess that we can expect that telecom companies will market their products just as the power companies do. Therefore in future broadband may be marketed with for example a free land line included or just as likely with free broadband included with the line rental.
    The truth is that marketing is all smoke and mirrors. The last thing they want you to do is to directly compare prices. So expect more variation, more free gifts and more free months.
    But of course we all pay the going rate and that price will be driven down by competition eventually, until off course they find new ways of creating more smoke and mirrors.

  10. Captain.Cretin

    Thats ANOTHER thing the ASA and OFCOM should deal with, claiming 2/5/10p per minute, but hiding the 25p connection fee and the 18p termination fee in the small print, so that is 45p for a frigging sub 60 second call!!!

  11. cyclope

    It’s only the bigger providers that have been raising the price of line rental, This is purely down to it subsidising cheap or free bb and tv packages,they use to lure new customers into their clutches,
    BT line rental with lrs and unlimited any time calling plan would of cost me around £24 per month, But i have cut that by £10 by switching to a smaller provider, calls are 1p per min and there are no call set up fees ,So i would have to make a lot of calls to spend £10, and there is no 12mth contract to worry about

    10years i had been with BT for line rental, but when they reward your loyalty each year with a kick in the teeth(price increase prices of line rental and calling plan, reduce the advantages of paying 12mths in advance (LRS) remove free inclusive add-ons)It’s time to say enough i’m out

    • It’s not only the bigger providers, a lot of smaller ISPs have roughly followed the same trend (e.g. Zen Internet, Hyperoptic). But certainly there are also some smaller ISPs that do have cheaper line rental than the big boys.

  12. Captain.Cretin

    I’m with Aquiss, I pay £13.99 line rental, get cheap UK calls with no extra fees, and cheap international calls (5ppm to ChinaMobile). If I were to sign up with BT for the same services I use, it would be more expensive, despite the BT headline Fibre cost being much lower than the price Aquiss advertise.

    My average UK call cost is £2.50 per month on Aquiss, which would be nearer £12 with BT, due to the fact they are nearly all short 1-2 minute calls)

  13. cyclope

    @Mark Jackson: Not sure why Hyperoptic are charging line rental for a copper pair when they provide FTTH/B to their customers , a copper pair inst required FVA or what ever it’s called should work fine for voice,
    If i had the chance of FTTH there’s no way that i would be paying for a copper pair on top of that,

    It’s all down to the make the bb cheaper, and kick ass on the line rental mentality, because some are too think to do their sums before placing their orders with one of the big players, who only offer access to part of the internet,& have poor support,

  14. isis

    line rental for copper wiring whats been paid for over and over and BT cowboys bodge it when problems go wrong and they say superfarce fibre where at its as bad as the licence fee for watching the shit on tv .

  15. cyclope

    Lol you mean like that rubbish on the bbc

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