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

Wednesday, December 30th, 2015 (1:04 am) - Score 7,017

Inflation has long been believed to play a key role in the annual line rental rises and some providers have in the past used it as an excuse, although that theory appears to have taken a hit after BT and TalkTalk announced their 2015/16 line rental hike and increased the standard monthly price to nearly £18 (this is roughly in keeping with previous rises).

However over the same period the Consumer Price Index (CPI Inflation) has remained virtually flat, sitting at around 0.1% (12-month rate from July 2014 to July 2015) and even the 12-month rate for RPIJ stood at just 0.4% or 1% for traditional RPI. All these measures are well below previous years and yet the line rental increases appear to be totally unaffected.

History of UK Inflation
2011 – 4.5%
2012 – 2.8%
2013 – 2.5%
2014 – 1.5%
2015 – 0.1% (August 2015 Prediction)

NOTE: The Government inflation target tends to be 2%, but in practice a country’s economy is dynamic and difficult to control.

We should point out that some of the big ISPs also offer an annual pre-paid “Line Rental Saver” or “Value Line Rental” discount, which saves a few pounds per year off the normal monthly cost, but this too has also been steadily increasing in price and now tracks much more closely with standard rental, only a little cheaper. Some ISPs, such as Sky Broadband, have also scrapped it.

The Broadband Impact

Ofcom’s Q4 2014 fixed line statistics reveal that, despite all of the upheaval in prices and lower consumer usage, the UK ended 2014 with 33.2 million fixed lines (25.49m residential and 7.744m business) and that was down by just 0.2% on the end of 2013, although residential lines actually increased by +524,000 over the same period (i.e. the decline came from businesses).

The above figure represents both traditional style phone (PSTN) and ISDN lines from all of the major telecoms infrastructure providers, which includes lines that are actively delivering broadband (Internet connectivity is usually carried down the same physical line as your phone service). Ofcom’s separated figure for small business and residential broadband lines came to a total of 23.73 million for 2014 (up from 22.8m in 2013).

One thing all of this data consistently tells us is that the rising line rental prices and lower voice call revenues are not being converted into a mass move away from fixed line connections, which isn’t surprising because you still need one of those lines to deliver broadband and that’s true regardless of whether it’s copper, coax or pure fibre optic (i.e. some sort of charge for the physical line must always exist).

Meanwhile most people continue to view alternative Internet connectivity services, such as Mobile Broadband, as more of a complement rather than a replacement for fixed line broadband (largely due to the higher cost of mobile data and other service restrictions). Similarly a poll of 998 ISPreview.co.uk visitors conducted last year found that 64.3% of respondents would happily get rid of their phone line if it wasn’t still required for their home broadband connection (captive market?).

Ultimately the actual voice calling component of “phone line rental” only accounts for a very small slice of the overall service cost and, when taken together, all of the above factors would thus appear to suggest that ISPs are using line rental increase as a means to off-load the rising costs of broadband provision (this may also help to make their broadband prices seem lower).

We subsequently questioned BT on their latest price rise and asked what aspects had specifically caused the most recent hike, particularly given the flat level of inflation.

A BT Spokeswoman told ISPreview.co.uk:

We are sensitive to the economic times and we realise no-one welcomes a price rise. We are investing heavily in order to offer some of the best value bundles of lines, superfast Infinity broadband and TV for new and existing customers. We have looked after the most vulnerable customers by keeping BT Basic the same price of just £5.10 a month and adding the option of a broadband bundle for just £9.95, which is the cheapest in the UK.

Specifically, at BT, a line and Infinity is now 23 per cent cheaper than five years ago. We are also giving value back with a ‘double your data’ offer for broadband customers who sign another contract. For example, a broadband customer on a 10Gb allowance would upgrade to a 20Gb allowance for free.”

The response was somewhat of a canned statement and one that unsurprisingly avoided answering our question, but when we put this concern to them they did at least confirm that the investments they make “affect all our rises“. None of this is unique to BT and most of the other big ISPs play the same game. More over the page..

Leave a Comment
21 Responses
  1. Avatar SpencerUk says:

    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. Avatar aslam says:

    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. Avatar Captain.Cretin says:

    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. Avatar gerarda says:

    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. Avatar NGA for all says:

    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?

    1. Avatar SpencerUk says:

      The magical words of “Right When Tested” xD

  6. Avatar EthernetMonster123 says:

    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.

    1. Mark Jackson Mark Jackson says:

      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.

    2. Avatar FibreFred says:

      If you don’t need a line cease it.

    3. Avatar EthernetMonster123 says:

      @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?

    4. Avatar FibreFred says:

      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. Avatar Naims Rep says:

    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. Avatar Groucho says:

    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. Avatar PeterM says:

    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. Avatar Captain.Cretin says:

    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. Avatar cyclope says:

    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

    1. Mark Jackson Mark Jackson says:

      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. Avatar Captain.Cretin says:

    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. Avatar cyclope says:

    @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. Avatar 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 .

  15. Avatar cyclope says:

    Lol you mean like that rubbish on the bbc

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