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

Wednesday, December 30th, 2015 (1:04 am) - Score 7,065

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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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
21 Responses
  1. isis says:

    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 .

  2. cyclope says:

    Lol you mean like that rubbish on the bbc

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