Published: Thu, October 26, 2017
Business | By Max Garcia

Ofcom slashes phone bills for one million BT landline customers


"So I'm pleased BT has responded to our plans in full by cutting these customers' bills", he added.

Commenting on the news, Richard Neudegg, head of regulation at uSwitch.com, says: "BT's voluntary agreement to cut bills for these customers at the upper end of Ofcom's proposal is especially laudable in light of the fact landline-only services are usually taken by more vulnerable - particularly elderly - customers".

The regulator also said it wanted to help those who buy a phone service from one provider and broadband from another.

Ofcom expects other providers to follow suit. This group of customers can choose to stay on their current package, or move to the standard product being cut, depending on which is the best deal for them.

"The cost savings will provide headroom to offset market and regulatory pressures, and support increased investment in delivering great customer experience and leading networks", BT said. On average, the cut means that households can save up to £84 a year.

BT said that as a result of its agreement with Ofcom, up to 1 million of its customers would see their monthly bill fall from April 2018.

The price cut will take effect from April 2018, appearing automatically on bills for around 800,000 customers.

Ofcom said those customers had been receiving poor value for money in recent years compared to those who buy bundles of landline, broadband and pay-TV services.

Ofcom said it stepped in because bills for landline-only customers - almost two-thirds of whom are over 65 - have "soared" in recent years despite BT and other landline providers benefitting from significant cuts in the cost of providing the service. Ofcom found that in recent years the price has risen by between 23% and 47% in real terms, while the underlying wholesale cost has fallen by c.27%.

Future line rental and call costs will be capped at the rate of inflation. A further 200,000 customers on BT's "Home Phone Saver" package will also be eligible but will have to apply.

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