Is it good to talk? Line rental prices keep rising

The days of BT supplying devices free of charge etc were not good. These low charges for hardware etc were offset by extortionate charges for calls, even basic local and national calls. Charges for international calls in the 1980s and early 1990s would breach the current roaming price caps, even without adjusting for inflation. The whole thing was a total rip-off where charges bore little connection to cost.

Fibre broadband is simply not an option for many of us at present, and it could be years before we are all connected. I had a 90 minute power cut recently and my mobile was dead. I have one wired landline phone, so I spent the time phoning friends.

My point is that fibre broadband should be an option for most people; I’m well aware that it isn’t currently. Copper telephone lines have had their day and should be confined to history as soon as possible.

As I see it, we are moving towards fibre broadband at a reasonable rate and to roll it out faster would mean a substantial increase in what we are expected to pay.

I have several friends who have never seen a download speed of 1Mbps. Might it be fairer to prioritise areas with a very poor service rather than replacing copper wiring in areas with a 5 – 10Mbps service, which many users find satisfactory?

I agree that priority for a blanket fibre rollout (e.g. by BT Openreach) should be given to rural areas where the improvement in speed will be greatest. Urban areas already benefit from a competitive market where niche providers like Hyperoptic are already providing fibre broadband without using BT Openreach’s infrastructure.

One of the reasons that I am very keen to keep my landline is that it is usually expensive to call a mobile from landlines. NFH has thought about this, by setting up a virtual 020 number, but I wonder if some mobile users realise how much it can cost to call them. I have often wondered whether it is the landline or mobile provider that makes money out of these costly calls.

@wavechange – I think the answer to your question is that it’s the landline providers who make the bulk of the excessive profit from calls from landlines to mobiles. I draw this conclusion because:

1. Using FreeVoipDeal.com, I can call UK mobile numbers for €0.007 (0.5p) per minute. The termination rate payable to the mobile networks must be even lower than this retail price.

2. Consider the prices charged by the mobile networks themselves for bundles of calls for mobile-to-mobile. They are similarly a fraction of the price charged by landline providers for calls to mobile numbers.

Thanks NFH. This seems a reasonable assumption.

Termination rates for calls to 01 and 02 landline numbers are around 0.21p per minute. – Thanks Ian. What are the termination rates for calls to 03 numbers? I believe they are higher. In July 2014, FreeVoipDeal stopped charging 03 numbers like 01 and 02 numbers and started surcharging them at €0.03/min. FreeVoipDeal are based in Luxembourg so don’t seem to respect Ofcom’s rules about 03 numbers be charged at the same rate as 01 and 02 numbers.

Thanks for that Ian. If the cost to an operator of delivering an 03 call can be double that of an 01/02 call, how can operators be expected to charge 03 calls at the same rate as 01/02 calls? I’m therefore not surprised that non-UK operators ignore Ofcom’s guidance. This needs reform, otherwise 03 will become another 0845, particularly as more consumers buy their telecoms services from other EU countries.

Thanks again Ian for this useful answer. How do termination rates for 03 numbers compare with those for 0845 numbers?

I agree totally with your comments about the lack of correlation between retail charges and termination rates for calls to mobile numbers. It’s similar with international calls in that charges are based according to what operators believe the general public perceive to be normal rather than being correlated to cost.

Simon – do you also believe that networks should include calls to 09 numbers in inclusive minutes? I don’t understand the basis on which you believe that a surcharge can be included within inclusive minutes without making a loss for the network or without the majority of customers unreasonably footing the bill for the minority. There is no economic difference between including 09 numbers and including 0845 numbers except that the magnitude is different.

I have made plenty of use of calls to 0845 and 0870 numbers, and I chose my phone tariff because these calls are included, as are weekend and evening calls to mobile numbers. It’s a case of choosing the tariff that best suits your needs.

Thanks wavechange, I always try & look at prices over the 12months & not just monthly.

And as for the complaint i always try & follow the same system (as you can see from my comment).

First I mention the company in a tweet (I never tweet the company direct as only you & the company see it, it’s better to send an open tweet so as many people see it as possible). I also like to include Which in the tweet: https://twitter.com/WhichConvo

Then depending on what reply I get, I follow it up with a e-mail to the complaints team like i did today (and copying the tweet into the e-mail so the company knows I moan on social media). Or sometimes the company will contact me first following the complaint tweet.

To update this, I have this morning had a email from “Hugh Stacey – Senior Telephony Marketing Manager”, just proves my point – when you moan on Twitter the top people contract you.

While I still don’t have the outcome I would like (A £39 goodwill credit to cover the increase) I do believe things are moving in the right direction.

Well done Lee. What my service provider’s £1 per month price increase achieved was to encourage me to look at my present tariff, switch to a cheaper one that is more suited to my current requirements and cancel paper billing. I’m now saving around £5 per month.

The “lines” which we “rent” have been paid for decades ago when installed. Yet we still pay for them on a “monthly” basis…month by month… year by year….FOREVER! The actual piece of fibre optic line costs LESS than that. The govt should step in on this ENDLESS scam by BT (and the rebranded 3rd party companies) and end this RENTAL scam.

The maintenance and renewals of the telephone lines and all the technical equipment in the exchanges still has to be paid for.

The sneaky thing about line rentals is that, during the early days of British Telecom – after it separated from the Post Office – the tariffs were changed from quarterly billing to monthly billing and this has enabled the rates to rise less noticeably but more expensively for many years now.

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Agreed Duncan, but my point was that the translation to monthly billing meant that price rises did not appear to be so significant. A one pound rise on a monthly bill does not look so bad as a three pound rise on a quarterly one so is easier for BT to get away with. I have no complaints about monthly billing as a payment mechanism but I confess I never bother to check my bills when they come in attached to an e-mail. Paperless billing has also allowed tariff increases to go through with little attention to them.

Lets do the Maths. One of the local boxes – many of which become vandalised and BT do not consider yellow lighting over to protect their property and the privacy of people’s phone lines – one of those boxes has 300 land lines and there are 100000 PCP street cabinets each producing just over 61 thousand pounds in line rental costs per year. There is often a guy at ours, for maybe four hours per week, parts, tools, training and labour for six hours (to include travel and flock ups) can not be more than 10 thousand a year. A roving team to fault find where flooding and earthquake have brought down the line, and to ameliorate natural wear and tear are doing another twenty hours per box per week all told at a further (they are not all engineers – just one is an engineer!) 30 thousand a year and each of the 5600 odd exchanges has one guy who has a team of two or three and they mend and make do full time 40+ hours but this is divided by the total customer base and gives 120 thousand for the team and all their maintenance requirements, so 5600 x 120000 /100000 gives 6720. Sixty one thousand minus all these running costs leaves fifteen thousand pound yearly box by box surplus assumed on only twenty percent of the boxes, there being five percent of boxes which run at a loss, fifteen percent of boxes. However the loss is not as much as the surplus and I feel it is the policy of BT to continue to raise line rental prices until she is called before the European Commission for the fifth time or all her boxes are making her a profit in lines rentals. These estimates are slewed towards the more expensive and yet there is still clear profit for BT of 225 million pounds per year in line rental alone, why is she happy to allow other companies to offer calls? Before the call plans and swinging little extras, she is in black and it is all line rental. Upgrades and overhauls? Glass fibre technology became commercial available in the 1980s when Britain was a powerhouse, they could not be arsed then and apart from a couple of PR stunts, they still can not.

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I thought we were going to see some credible mathematical computations, not a speculative back-of-an-envelope attempt at sensationalist guesswork.