BT tariff rise adds pounds 36 to phone bills

BT is to increase the line rental charges for residential and business users in a move that will put an extra pounds 36 on domestic phone bills a year.

The price increases will fuel concerns that higher line rental charges discriminate against customers who make few calls. However, BT said the new tariff was part of its agreement with Oftel, the telecoms regulator, under which revenue from rental increases is used to cut the cost of calls.

The decision comes ahead of an announcement by Oftel on Monday which will outline its proposals for the new price structure that will come into force in July 1997.

The stock market reacted warmly to the news, marking BT shares 9.5p higher at 355.5p yesterday as some analysts suggested that the Oftel review was not expected to be too Draconian.

The new line rental charges will come into force this July and will be pounds 25.69 per quarter for residential customers and pounds 41.13 for businesses.

BT said the changes were the first increase to line rentals for 17 months and amounted to just a penny extra a day.

It also announced a programme to provide free conversion to modern plug and socket connections for customers who still rent phones with direct wiring. This normally costs pounds 29 but the fee will be waived during a special offer period of six months. Around 1.8 million customer still have direct wired phones.

Don Cruickshank, director general of Oftel, welcomed the changes. "BT has met its commitment to ensure that the increases in exchange line rental are such that no customer will suffer a real increase in his or her quarterly bill (for the same usage). He said the price changes followed reductions in call changes which were announced on Tuesday.

BT also drew attention to its low user scheme for people who make relatively few calls but need a phone as a lifeline. The maximum number of calls participating customers can make will be increased to pounds 15.67 a quarter from July. Customers within this receive up to 60 per cent off their rental charge.

BT said that main prices were coming down by more than pounds 300m this year. It also said the rental charges represented an increase of 3.7 per cent for residential customers and 2.4 per cent for businesses - below the 3.9 per cent increase in the retail price index since the last charge review in February 1995.

BT stressed that no customer's bill would increase by more than the current rate of inflation, 2.4 per cent. Under existing regulations BT can only increase its prices by 7.5 percentage points less than the prevailing rate of inflation.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory