Ofcom condemns poor value for money on landline-only accounts with plan to force biggest provider BT to trim phone bills by up to £7 a month
Ofcom has slammed telecom providers for offering landline-only customers poor value for money, as it unveiled plans to force BT, the dominant provider, to cut bills by at least £5 a month, benefiting about 2.3m people.
The regulator has reviewed how the market is working for customers who buy only a landline service from a provider – either because they do not want broadband or pay TV, or because other companies provide these services.
Ofcom said the customers, who tend to be elderly people who have been with BT for decades, were getting “poor value for money”.
The watchdog aims to force BT to cut its standalone line rental by £5 to £7 a month which means customers with only a landline, who currently pay £18.99 a month, would pay no more than £13.99 – a reduction of at least 26%. The price cut would not apply to landline services sold by BT as part of a bundle of services including broadband.
BT accounts for nearly 80% of the landline-only market of 2.9m people. At the start of the review in December, Ofcom said BT and Virgin Media had the highest line-rental charges, followed by TalkTalk and Sky. At the time, Virgin Media launched a “Talk Protected” plan which freezes line rental for elderly and disabled customers at £17.99.
Ofcom expects other providers who benchmark prices against BT to follow suit and cut landline rental charges. The regulator’s investigation closes in May. It will announce a final decision towards the end of the year.