BT Landline Only UK Phone Customers to See £7 Price Cut on Sunday

Ofcom has confirmed that UK consumers who take a landline-only phone service from BT will, from Sunday, pay £7 a month less for their line rental (i.e. £11.99 inc. VAT instead of £18.99). As part of the agreement BT will also cap line rental and call charges, to increase by no more than inflation, for 3 years.

Telephone line rental prices have risen sharply over the past few years (partly to help balance against the rising cost of service provision in other areas [broadband] and lost revenues from voice calls), while the underlying wholesale cost has actually fallen. A review by Ofcom noted that consumers who bundle broadband, phone and / or other services tend to benefit from big discounts but those who only take a landline were suffering.

The identified issue is often “felt most acutely” by elderly and vulnerable people who tend to shun bundles and stick with the same provider / standalone line rental product for years. The UK is home to a total of 1.5 million landline-only customers and two thirds of those are with BT. In response Ofcom and BT last year reached an agreement to reduce the monthly rental by £7 for related customers (full details).

Jonathan Oxley, Ofcom’s Competition Group Director, said:

“We had serious concerns about soaring bills for loyal landline customers. This was hurting people who rely on their landline, many of whom are elderly.

We’re pleased that BT has cut prices, which means these customers get a fairer deal, and they’ll be protected from price rises in the coming years.”

The change is now about to be introduced and as a result BT has just written to nearly 900,000 of its customers who buy only a landline service. More than 700,000 of these don’t have to do anything to benefit from this price cut but there are a few things to note.

The discount is only intended to apply to BT landline customers who don’t buy fixed line broadband from any provider, which means that those who access the internet on their mobile or via satellite broadband will still be eligible (Ofcom doesn’t mention fixed wireless broadband but we will check (assumption is that this will be like satellite and mobile)).

On top of that BT has also written to 190,000 of its landline customers who have chosen to receive paperless bills, asking them to confirm that they don’t have broadband (it’s quite tedious for BT as a retail ISP to know if other providers have a working broadband connection on the line). Customers who confirm this will be eligible for the price cut. We suspect that a few may try to game the system and it’s unclear how BT would respond to that, aside from adjusting the price the moment they found out.

A further 200,000 customers on BT’s ‘Home Phone Saver’ package could also qualify. They can choose to stay on their current package, or move to the standard product being discounted, depending on which is the best deal for them.

The agreement also requires BT to help those who buy a telephone service from one provider and broadband from another, albeit only by explaining that they could get a better deal if they purchased such services as part of a bundle.

A BT spokesperson said:

“We welcome the fact that up to 900,000 of our customers who don’t have broadband will receive a substantial reduction in the price of their line rental from 1 April 2018.

We listened to our landline-only customers and made a voluntary agreement with Ofcom to reduce the price of line rental for them by £7 a month, or £84 a year, which means they will only pay £11.99 a month for standard line rental.

This will come in to effect shortly for all landline-only customers who just take phone services from us and don’t have broadband (either with BT or someone else). The vast majority of customers won’t have to do anything to receive the discount, and we have written to a group of customers to clarify if they qualify for the reduced rate. New customers and any customers who switch to BT solely for a phone line and calls can also take advantage of the £11.99 price.

We already offer low income customers on certain benefits a special tariff called ‘BT Basic’ and also offer Home Phone Saver that provides a great value option for customers who want a traditional phone service, with Anytime calls and other benefits. We have promised that the price of Home Phone Saver will not go up before 2021.”

Finally, the regulator still hopes that other operators will follow BT’s lead, although they aren’t currently required to do so. The good news is that the Post Office, which serves the second largest share of the landline-only market after BT, recently confirmed to Ofcom that it will be offering a new price of £11.50 from May 2018. Meanwhile Virgin Media has already frozen the price of line rental for its elderly and disabled phone-only users (here).