Credit, Collections & Insolvency News
Ofcom has announced that more than two million people who buy only a landline telephone service from BT will see their monthly bills cut by at least £5 per month. Ofcom 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 they take these services under separate contracts, usually from different companies.
Ofcom have found that these customers – 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. Landline-only customers are particularly affected by price hikes in telephone line rental. Major providers have increased their line rental charges significantly in recent years – by between 25% and 49% in real terms. This is despite providers benefiting from around a 26% fall in the underlying wholesale cost of providing a landline service.
Sharon White, Ofcom Chief Executive, said: “Line rental has been going up, even as providers’ costs come down. 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. So we plan to cut BT’s charge for customers who take only a landline, to ensure that vulnerable customers get the value they deserve.”
Citizens Advice welcomed the move and encouraged similar action in other markets. Citizens Advice Chief Executive Gillian Guy said: “Loyal customers often pay much more for their essential bills. People who stay with the same phone, broadband, gas and electricity supplier are getting a raw deal – as firms know they are less likely to shop around to get a better price. The plan Ofcom has announced today to help reduce the bills of elderly and vulnerable people is a really positive move – and we’d like to see similar actions in other markets, starting with energy.”
“Extending the prepayment meter cap to people on a standard variable tariff who are eligible for warm home discount would help some of the poorest pensioners and families heat and light their homes.”