Ofcom forces BT to cut over two million monthly phone bills by £5

Healthy competition between the UK's quad-play providers may have led to lower prices for all-in-one broadband, phone, TV and mobile packages, but some customers like to pick and choose individual providers for each job. For landline customers in particular, that decision could mean they're paying a lot more than they actually need to. Ofcom, the UK's communications regulator, believes that as many as two million people who are signed up to landline-only contracts with BT are getting a rough deal, so it's put forward a plan to cut their monthly bills by at least £5 per month.

As part of an overall review of the market, Ofcom found that millions of customers -- typically elderly or vulnerable people who stick with the same company for an easy life -- are being unfairly lumped with the price hikes in line rental. Line rental prices have gone up by between 25 and 49 percent depending on the provider, even though the wholesale price for landline services has fallen by 26 percent in recent years.

Ofcom says it wants to "give customers with standalone landline contracts additional protection" by slashing their line rental by at least £5 per month, or £60 a year. The regulator adds that it wouldn't affect landline services sold as part of a bundle, but would see landline-only customers pay a rate last seen in 2009.

"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," said Sharon White, Ofcom Chief Executive. "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."

To further safeguard customers, Ofcom also put forward a proposal that would prevent BT from raising the cost of line rental and landline call costs by more than inflation. It's believed that regulation in this area will force competitors to reduce their prices too, making it fairer on all consumers.

BT responded to the review noting its special tariffs for vulnerable customers and recent line rental price freezes:

"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 benefitted 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."

Ofcom is inviting public feedback on its proposals between now and May 9th.