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Ofcom plans to slash BT Consumer line rental
Tuesday 28 February 2017 08:54:03 by Andrew Ferguson

Ofcom as part of its landline review has decided that BT Consumer has significant market power for standalone landline services and is planning to force the consumer arm to reduce its line rental price by £5 to £7 per month for those who don't also have a BT Consumer broadband service.

"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.

Sharon White, Ofcom Chief Executive

This is not written in stone just yet, as the plan has to go out to consultation and one can envisage that while BT Consumer does have the lions share of the standalone market, those smaller providers who have always undercut BT Consumer by £3 to £5 month may have something to say if they are suddenly competing against BT Consumer standalone line rental at £13.99 per month, it is conceivable that some of low cost standalone line rental providers may exit the market increasing the dominance of BT Consumer. The proposals also apply to those who take a voice only service and make use of line rental saver.

Ofcom is holding out the hope that by forcing the hand of BT Consumer that its competitors will follow suit, in a similar way to how many of them have tracked the price rises in line rental for the last few years.

Future price rises to recover the cost of this price cut are guarded against for landline only customers by requiring BT Consumer to keep any price rises below the Consumer Price Index and this covers line rental, call charges and the call package add-ons. Though it is not clear if those taking a broadband and line bundle from BT get the same call protections, so the millions of reduced revenue might be recovered by increasing bundle prices.

Essentially this is correcting the perceived failure of the decade old LLU revolution to service the voice only segment of the market. The number taking a landline only service is some 2.9 million households.

So what about those who take voice line rental from BT Consumer and broadband from another provider (i.e. WLR3 and SMPF broadband) well it appears that this market of 1.2 million (part of the over 2.9 million households - change is limited to residential services) will also benefit.

There is now a consultation period running until 9th May 2017 and this means don't expect any price cuts soon.

A price cut of £5 in BT Consumer line rental might see more people taking line rental as a standalone product when chasing the cheapest combinations of broadband and phone, but there is also the real chance that at a time when the Government is trying to encourage more people to make use of broadband to make running public services cheaper that a wider gap in the cost of a phone line and then a phone/broadband package will discourage people from buying fixed line broadband.


Posted by csimon about 1 month ago
The small "undercutters" have been playing the same game recently anyhow - increasing line rental just because the major players have done it. Look at one of the traditional ones (Primus Saver - now Fuel Broadband), line rental is now £17.60. Hopefully regulation of line rental will bring back meaningful competition and allow shopping around for best deal again, the free market doesn't work without regulation, which is perverse but that's the way it is.
Posted by meldrew about 1 month ago
THe problem is that you have to have a line for broadband so however it is disguised the BB users can expect a price increase to pay for the lower line rental charges. Actually I do not know a pensioner who has not got a BB connection. Expect the usual bucketload of unintended consequences.
Posted by AndyCZ about 1 month ago
We should be seeing single order GEA (FTTC without the telephone line rental element) in the latter stages of this year or start of 2018.
Posted by csimon about 1 month ago
@meldrew: "you have to have a line for broadband" - No you don't. I don't have to have a landline for my broadband.

"I do not know a pensioner who has not got a BB connection" - I do, my mother.
Posted by csimon about 1 month ago
@meldrew: "however it is disguised the BB users can expect a price increase to pay for the lower line rental charges"

Considering BB prices have been kept artificially low by the artificially high line rental costs, I actually think this is a good thing. Effectively, landline-only customers have been subsidising BB customers. This proposal *should* *hopefully* go some way to fixing that.
Posted by mr_mf about 1 month ago
@meldrew - I know two people, both my grand mothers (both in their 80s)
Posted by zyborg47 about 1 month ago
so people like me will still have to pay sky high line rental, Offcom is a waste of space they really are.

@meldrew, I know a few pensioners that do not have broadband, my Dad being one.

Posted by Johnsoap about 1 month ago
The BT "Land Line" is used to provide two services. A telephone line and a broadband connection.
The sugestion that someone who ONLY has a phone line provided over the "Land Line" shoud pay less for their service is only really fair if someone who ONLY has a broadband connection provided over the "Land Line" also pays a reduced rate. The two services should be split and charged seperatly.
Posted by leexgx about 1 month ago
whichever way you do it you still pay the same with or without a usable phone line (i only seen vodafone not needing a phone line but its still £27 for it, the phone line is still connected but doesn't allow calls)

virgin ?
Posted by CSS78 about 1 month ago
I have a residential phone line and business broadband, would I get the £5 discount as I don't have residential broadband ?
Posted by csimon about 1 month ago
@leexgx "virgin?"

No - BT Wholesale FTTP. It doesn't require a landline but BT requires you take line rental with them. if you want their broadband. I actually have my broadband with another provider that doesn't require line rental.
Posted by Angus973 about 1 month ago
Both Broadband and line rental should be charged fairly to everyone, regardless if taken together from a supplier. Not very difficult.
Posted by csimon about 1 month ago
Quick look at BT's web site shows that unlimited bandwidth 53Mbps FTTP is £30, this includes the unnecessary line rental and UK weekend calls, which separately cost £19. This means that the FTTP component is £11 which to my mind is unfeasibly cheap. The conclusion is that the line rental estimate is is way too high and is subsidising/masking the real cost of the BB in the overall package, therefore the standalon price of £19 is also way too high. Never mind a £5 reduction, it should be more like £10 off, more in line with the wholesale costs, currently around £6?
Posted by 21again about 1 month ago
Ofcom are once again late to the table the increase in LR charges should have been tackled 5 years ago at least.
Line rental is available for £13 a month with separate charges levied for calls (my exchange is 20CN)from a SP and they must surely be making a profit on that provision to the end user.
Posted by AndrueC about 1 month ago
Heh, maybe we need to split the charges out more instead of trying to combine them.

Line rental charge. ~£10pcm?
Voice service charge. ~£2pcm?
Data service charge. £20pcm or higher.
Posted by AndrueC about 1 month ago
So those who only want a voice service don't pay for data provision and those who don't need voice don't have to pay for that.
Posted by csimon about 1 month ago
@Johnsoap: "The two services should be split and charged seperatly"
@AndrueC: "Heh, maybe we need to split the charges out more instead of trying to combine them"

Yes yes yes! The earlier directive to show lien rental as part of the BB cost was ill-thought out and addressed a question that hadn't been asked. All it did was allow the providers to increase prices further. the real problem is the forced bundling of line rental with BB, which is anticompetive, stifles competition, and raises prices. The evidence speaks for itself.
Posted by andrew (Favicon staff member) about 1 month ago
Forced bundling is part of the full LLU process and removing full LLU or forcing LLU providers to offer both MPF and SMPF might not be popular with those operators
Posted by NetGuy about 1 month ago
@csimon - "have my broadband with another provider that doesn't require line rental."

So do you mean that line rental is paid to another firm, or absorbed into the broadband fee...

Either way, I'm interested to know which firm(s) you use, please?
Posted by csimon about 1 month ago
@NetGuy I'm with AAISP, broadband package only. I pay line rental to Fuel.
Posted by csimon about 1 month ago
@NetGuy It follows that if BT did reduce their standalone line rental fee substantially, I might even consider moving back to them (for line rental). Fuel have followed suit recently with rising line rental so they're no longer very competitive as compared to their Primus days. I very much prefer AAISP to supply BB, this is where people who prefer not to bundle all their services to pick the best provider for each service lose out on the over-inflated line rental costs.
Posted by bsg017 about 1 month ago
As an unlimited BT broadband customer (Infiniti 1) my line rental is not bundled into my package as it was a renewal, and I pay extra separately. Is this going to be an extra incentive to change away from BT, and possibly come back later, as they are less likely to include line rental in a renewal bundle? Are the line rental costs of Broadband (installing a 'switch and or filter' in the exchange?)included in the Broadband charges?
Posted by swainswick about 1 month ago
I am forced to have a home telephone line to get internet access.
From Sept 2015 to Sept 2016 I was with Sky and got a deal whereby it cost me nothing for the whole period. Due to many technical problems and disconnections I received compensation so Sky ended up paying me about £30 in total. Sky didn't want to offer me a new deal so...
...from Oct 2016 to Oct 2017 I am back with Plusnet (a subsidiary of BT); total cost for internet and line rental £108. So far two very short disconnections, just a few minutes and most of that was the router reconnecting, so haven't claimed compensation.
Posted by michaelkenward about 1 month ago
Drat. This means that BT will not have another spare billion for yet more footie.

BT goes out of its way to make its charging regime opaque, with bundles and stuff and sneakily renewing your contract when you are simply adding a new "feature" to your service.
Posted by dgauss about 1 month ago
OH boo, hoo BT. Magic fees like this one should be taxed at 75%. Money obtained should be used to provide publicly owned net infrastructure. This way anybody could be a provider. Companies like BT are selling us access to the things they do not own or create. Whole concept is a money grab. :D
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