The group said that it had 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 they take these services under separate contracts, usually from different companies.
They found that these customers – who are often elderly or vulnerable people who have remained with the same landline provider for decades – “are getting poor value for money in a market that is not serving them well enough”.
“So Ofcom intends to give customers with standalone landline contracts additional protection by cutting the cost of BT’s line rental by at least £5 per month – or £60 per year,” the regulator said.
Ofcom said that landline-only customers tend to be particularly affected by price hikes in telephone line rental.
It said that some of the major providers had increased their line rental charges by between 25 per cent and 49 per cent in real terms in recent years, even though the underlying wholesale cost of providing a landline service had actually fallen by around 26 per cent over the period.
Also on Tuesday, Ofcom said that it was also “proposing safeguards to prevent BT from making future increases to line rental and landline call costs by more than inflation”.
“Line rental has been going up, even as providers’ costs come down,” said Sharon White, Ofcom’s chief executive. “This hurts people who rely on their landline the most, and are less likely to shop around for a better deal. We think that’s unacceptable,” she added.
According to Ofcom data, the average landline-only customer has been with their provider for more than 20 years, compared to eight years for phone with broadband customers. A total of 43 per cent of customers with a standalone landline contract are aged 75 or over and 70 per cent of landline-only customers have never switched provider, or even considered doing so.
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