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 \u00a316.99, but we list this as 2015 because it was in place for most of that year).<\/em><\/p>\n Despite all this\u00a0the actual underlying wholesale cost<\/strong> of basic line rental has\u00a0held a fairly stable price point of under \u00a310 per month (Basic BT WLR is currently \u00a389.50\u00a0+vat per annum) and\u00a0indeed if anything the rental has actually fallen in price, albeit only by a little,\u00a0over the past few years.<\/p>\n On top of that most of the major broadband\u00a0and phone\u00a0providers (e.g. TalkTalk<\/a>, Sky, PlusNet<\/a>)\u00a0have\u00a0been 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),\u00a0yet once again the price that consumers pay for line rental has\u00a0continued to rise and\u00a0at roughly\u00a0the same pace as it always did.<\/p>\n In short, most consumes are getting less than before and yet they’re\u00a0paying 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.\u00a0Some of this change\u00a0is evident when looking at Ofcom<\/a>’s breakdown of line rental costs versus voice call revenues.<\/p>\n Ofcom<\/a> separately notes that retail fixed voice services generated \u00a32.03bn\u00a0of revenue in Q4 2014, which is a \u00a36m (0.3%) increase compared to the previous quarter, but it’s also a \u00a356m (2.7%) fall compared to Q4 2013 (BT\u2019s share of these revenues was 46.2%, a decline of 0.8% compared to one year earlier).<\/p>\n However\u00a0the ever increasing cost of line rental isn’t merely a function for offsetting against the decline of revenue from voice calls.<\/p>\n 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\u00a0calling services and of course\u00a0annual inflationary changes (the rate of increase in prices for goods and services versus previous years). More over the page..<\/p>\n <\/p>\n 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<\/a> announced their 2015\/16 line rental hike\u00a0and increased the standard monthly price to nearly \u00a318 (this is roughly in keeping with previous rises).<\/p>\n However over the same period the Consumer Price Index\u00a0(CPI Inflation<\/strong>) has\u00a0remained virtually flat, sitting at around 0.1% (12-month rate from\u00a0July 2014\u00a0to July 2015) and even the\u00a012-month rate for RPIJ stood at just 0.4% or 1%\u00a0for traditional RPI. All these measures are well below previous years and yet the line rental increases appear to be totally unaffected.<\/p>\n History of\u00a0UK Inflation<\/strong> NOTE: The Government\u00a0inflation target tends to be 2%, but in practice a country’s\u00a0economy is dynamic and difficult to control.<\/em><\/p><\/blockquote>\n We should point out that some of the big ISPs also offer an annual pre-paid “Line Rental Saver<\/em>” or “Value Line Rental<\/em>” 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\u00a0with standard rental, only a little cheaper. Some ISPs, such as Sky Broadband<\/a>, have also scrapped it.<\/p>\n Ofcom<\/a>’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<\/strong> (25.49m residential and 7.744m business) and that was down\u00a0by 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).<\/p>\n The above figure represents both traditional\u00a0style phone (PSTN) and ISDN\u00a0lines from all of the major telecoms infrastructure providers, which\u00a0includes lines that are\u00a0actively delivering broadband\u00a0(Internet connectivity is usually carried down the same physical line as your phone service). Ofcom’s\u00a0separated figure for small business and residential broadband lines came to a total of 23.73 million<\/strong> for 2014 (up from 22.8m in 2013).<\/p>\n 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\u00a0charge for the physical\u00a0line must always exist).<\/p>\n Meanwhile\u00a0most people\u00a0continue 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).\u00a0Similarly\u00a0a poll of 998\u00a0ISPreview.co.uk visitors conducted last year found that 64.3% of respondents would happily get rid of their phone line if it wasn\u2019t still required for their home broadband connection (captive market?).<\/p>\n Ultimately the actual voice calling component of\u00a0“phone line rental<\/em>” 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\u00a0off-load the rising costs of broadband provision (this\u00a0may also help to\u00a0make their broadband prices seem lower).<\/p>\n We subsequently questioned BT on their latest price rise and\u00a0asked what aspects had specifically caused the\u00a0most recent\u00a0hike, particularly given the flat level of inflation.<\/p>\n A BT Spokeswoman told ISPreview.co.uk:<\/strong><\/p>\n “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 \u00a35.10 a month and adding the option of a broadband bundle for just \u00a39.95, which is the cheapest in the UK.<\/em><\/p>\n 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<\/em>.”<\/p><\/blockquote>\n The response was somewhat of a canned statement\u00a0and one that\u00a0unsurprisingly avoided answering our question,\u00a0but when we put this concern to them they did\u00a0at least confirm\u00a0that the investments they make “affect all our rises<\/em>“. None of this is unique to BT and most of the other big ISPs play the same game. More over the page..<\/p>\n <\/p>\n In fairness ISPs do have a lot of factors to consider, such as the need to meet new government\u00a0\/ regulatory requirements\u00a0(e.g. adding a network-level filtering service) and to cater for the ever rising data usage demands of their customers or to recover lost revenues in other areas etc. Not to mention the age old desire for more profit and, in BT’s\u00a0and Sky’s case, their huge spend on TV.<\/p>\n At this point we’d\u00a0normally try\u00a0to contrast retail line rental movements with that of historic home broadband prices, but this is very difficult\u00a0to achieve due to the ever changing dynamic of special offers, service features\u00a0and other discounts, which makes it hard to establish a firm value baseline\u00a0for most of the major providers.<\/p>\n It’s also worth considering that during 2015 we’ve seen most of the big broadband ISPs\u00a0put their broadband prices up, with some such as TalkTalk making a bigger change than most (here<\/a>). Never the less\u00a0it seems clear that line rental has become the general sinkhole for many of the cost increases among\u00a0major ISPs, but that might not last forever.<\/p>\n As technology moves forward and consumer demands change then it’s becoming increasingly clear that the need for a traditional phone line is fading, which is something that hasn’t gone unnoticed by the wider industry.<\/p>\n The new generation of pure fibre optic (FTTH<\/a>\/P) providers and Virgin Media<\/a>’s existing cable network\u00a0already allow customers to take a true standalone broadband connection without a phone service. However, as explained earlier, you still have to pay for\u00a0the physical line entering your home and\u00a0thus the cost savings\u00a0aren’t as simple as directly subtracting\u00a0the phone line charge.<\/p>\n Price Differences (August 2015 Data)<\/strong><\/span><\/p>\n Virgin Media’s 50Mbps Standalone\u00a0Broadband\u00a0= \u00a328.50 Per Month Hyperoptic<\/a> 100Mbps Standalone Broadband = \u00a335 Per Month * * Additional connection fees sometimes also apply to standalone offers (e.g. Hyperoptic<\/a> charged \u00a340 and this effectively wiped out the price difference for year one).<\/em><\/p><\/blockquote>\n The examples above demonstrate that the practical cost difference between a standalone service and a bundle with phone\u00a0is not that huge. As such those who\u00a0complain about the cost of line rental should consider that even without a phone service the price they pay would not be radically cheaper, although it might be simpler and easier to promote.<\/p>\n But it’s not just pure fibre optic and cable ISPs that are planning to offer standalone solutions.\u00a0BTOpenreach are currently preparing to trial a new Single Order GEA<\/strong> service (details here<\/a> and here<\/a>).\u00a0The SoGEA solution is effectively a naked Fibre-to-the-Cabinet<\/strong> (FTTC<\/a>) product, which would give you superfast broadband over BT’s traditional copper lines but without the phone \/ voice\u00a0service. However it’s unlikely to deliver a huge cost saving\u00a0due to the aforementioned reasons.<\/p>\n In the meantime\u00a0some smaller providers on BT’s network, such as AAISP (Andrews & Arnold), are already attempting to offer something close to a “Naked DSL<\/a><\/em>” (standalone) broadband service by giving customers the ability to take a copper pair line with no calls \/ voice service alongside. Admittedly you still have to pay for the line rental, but at \u00a310 inc. VAT per month it’s very close to the base wholesale charge. Check out our Phone Line Rental Comparison<\/a><\/strong>\u00a0list to see some other cheap options.<\/p>\n![\"line](\"\/\/www.ispreview.co.uk\/wp-content\/gallery\/2015-internet-statistics\/line_rental_price_vs_declining_call_revenues.gif\")
<\/div>\nThe Costs of Line Rental<\/strong><\/span><\/h3>\n
\n2011 – 4.5%
\n2012 – 2.8%
\n2013 – 2.5%
\n2014 – 1.5%
\n2015 – 0.1% (August 2015 Prediction)<\/p>\nThe Broadband Impact<\/strong><\/span><\/h3>\n
The Future of Line Rental\u00a0<\/strong><\/span><\/h3>\n
\nVirgin Media’s 50Mbps Broadband [\u00a317.50]\u00a0+ Phone\u00a0[\u00a316.99]\u00a0= \u00a334.49 Per Month
\nPrice Difference:<\/span> \u00a35.99<\/strong><\/p>\n
\nHyperoptic<\/a> 100Mbps Broadband [\u00a322] + Phone [\u00a316] = \u00a338 Per Month
\nPrice Difference:<\/span> \u00a33<\/strong><\/p>\n