Ofcom orders cut to landline-only BT bills after years of soaring charges

Telecoms regulator Ofcom has ordered BT to cut bills for standalone landline customers by up to £7 a month after finding that they were getting poor value for money.

It said more than two million would benefit.

Ofcom said landline-only customers - often elderly or vulnerable people who have remained with the same provider for decades - were particularly affected by soaring line rental charges.

Providers - which include BT and its rivals such as Virgin Media, TalkTalk and Sky (Frankfurt: 893517 - news) , the owner of Sky News - have increased these by between 25% and 49% in real terms in recent years.

That is despite a 26% fall in the underlying wholesale cost of providing a landline service, the regulator said.

Ofcom's proposed cuts in the charge for BT landline-only customers would return the cost of line rental to 2009 levels in real terms.

The regulator also wants to stop BT from increasing line rental and landline call costs by more than inflation in the future.

Sharon White, Ofcom's 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."

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

Ofcom said its position in the market had allowed it to increase prices without much risk of losing customers and that rival providers had followed its lead.

The regulator said it expected that a cut in prices would also see rivals follow suit, meaning savings for customers across the landline-only market.

These customers have on average been with their provider for more than 20 years, compared with eight for those who have phone plus broadband deals and four for "triple-play" households.

Ofcom announced in December that it was launching a review of this part of the telecoms market.

The regulator said that landline-only households had not benefited from the strong competition for "bundled" deals packaging together landline, broadband and pay TV.

BT said it would respond to the Ofcom consultation when it had considered the detail.

It said in a statement: "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."