Regulator backing cut in bills for BT's landline-only customers

BT could be forced to slash the phone bills of millions of customers with a landline-only contract under proposals being considered by Ofcom, a move that would see £60 a year in household savings.

The plans will benefit over two million people that buy only a landline telephone service from BT, who will see bills cut by "at least £5 per month", Ofcom said.

The communications regulator said it found these customers are often elderly or vulnerable, or people who have remained with the same landline provider for decades, and are getting "poor value for money".

It found BT's market power has allowed it to increase prices without much risk of losing customers, with rivals then following the telecom giant's pricing lead.

Almost 80% of the UK's 2.9 million landline-only customers are with BT.

Ofcom said: "The cut would return the cost of line rental to 2009 levels in real terms, effectively reversing price hikes for landline-only customers.

"We are also proposing safeguards to prevent BT from making future increases to line rental and landline call costs by more than inflation."

Under the proposals, BT customers with only a landline, who currently pay £18.99 per month for line rental, would pay no more than £13.99, a reduction of at least 26%.

The regulator said customers of "bundled" services, packages including landline, broadband and/or pay TV, benefit from attractive deals, driven by strong competition.

But offers for landline-only customers have become "increasingly limited", with a number of providers withdrawing their telephone-only products altogether.

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."

Ofcom is proposing and seeking views on a range of £5-£7 per month for the cut to BT's landline-only line rental.

BT said in a statement: "We will respond to Ofcom's consultation fully when we have considered the detail.

"We take our responsibilities in this area very seriously and, unlike other companies, have many customers on special tariffs for socially excluded or vulnerable customers, including BT Basic, which still costs just £5.10 a month for line rental and calls, and Home Phone Saver.

"Recently, we have frozen the cost of line rental for all of our customers who take a BT phone line. We have also been improving the service we provide and customers have benefited from our multi-million pound investments in a faster fault repair service, the launch of our free nuisance calls prevention service BT Call Protect and bringing call centre work back from India to the UK."