/ Technology

Is it good to talk? Line rental prices keep rising

Arrow and phone

BT, Sky and TalkTalk are delivering unwanted early Christmas presents to customers by increasing line rental prices in December. And Virgin Media has announced a similar line rental price rise for February next year.

Perhaps you’ve battled price hikes by switching provider, paid a year’s line rental up front, or combined it with a broadband and TV package. But do you know how much you’re paying for your telephone line compared to a few years ago?

We’ve tracked the cost of line rental prices and found that regular price increases by the UK’s biggest providers mean you could now be paying up to 62% more now than you did in 2008. This is much higher than the cumulative inflation rate of 20.5% and means you now pay up to £77.88 more per year if you pay monthly – and that’s before charges for call packages and individual chargeable calls.

Line rental price increases since 2008

Come 1 December, BT and Sky will increase line rental by £1 a month (6%), and TalkTalk will increase its by 75p a month (4.7%). Virgin Media will increase its prices by £1 a month (6%) from 1 February next year. This follows similar above-inflation increases of £1 a month from Plusnet and The Post Office earlier in the year. You can see how much line rental prices have increased over the past six years in this graph:

Line rental price increases

Is it time to call time on the landline?

We’re begrudgingly familiar with price rises, but considering most of us are using our home phones less and less, landline price hikes seem to sting a bit more. Ofcom reports that we made 28 billion fewer landline calls in 2012 compared to 2003. And our own research has found people are spending £14.48 less each month on their home phone in 2012 compared to 2003.

Then there are those of us who only use our landline for broadband. Virgin Media is currently the only provider that offers a ‘broadband-only’ deal within its cable network area. Yet other providers still have a mandatory line rental charge – even for fibre broadband which, unlike ADSL broadband, doesn’t use the same copper line used for your voice calls.

How much has your line rental gone up? What have you done to try and reduce your home phone costs?

Following our Fixed Means Fixed campaign, Ofcom introduced new rules that mean anyone taking a contract from 23 January 2014 onwards can cancel without penalty if the provider increases prices mid-term and didn’t warn you when you bought it. Signed-up before then? You could argue a case of ‘material detriment’ under Ofcom’s old rules.

Comments
Guest
Nigel Whitfield says:
21 November 2014

BT’s latest increase is just one in a long line, plus of course the hidden charges. For example, when they changed earlier this year and started billing people for caller ID, which had previously been free with BT Privacy.

All my calls are made over the internet connection, with the exception of a few calls made by the burglar alarm when it’s turned on and off. Frankly, I could replace the alarm with one which uses a mobile SIM, and then I wouldn’t need a dial tone at all on the phone line.

Yet, with BT’s increases, I was paying for weekend and evening calls that I never made, plus their extra payment charge for using BACS rather than letting them help themselves to my bank account, and in the end it worked out at not far short of £20 a month.

I’ve now had my ISP take over the phone line, which is costing around £12.50 a month. As more and more people have mobiles, or make calls over the net, it’s about time BT was made to provide a really basic “DSL only” line, with no dialtone, at little more than cost price.

Guest

We stepped on this slippery slope when we accepted with no protest the changeover from quarterly billing to monthly charges for various utilities . It seemed to me that in no time at all we acclimatised to monthly line rentals that were not much less than the previous quarterly rates for line rental plus call charges . Expressing rentals in annual terms as the lead-in article does shows the enormity of the charge for what is a standard and universal utility service – no operator/service provider can add much value to a telephone line outside of broadbanding it [which costs extra anyway]. Comparing telephone charges with historic ones is another painful exercise for some of us; we can remember when not only did BT supply the instrument free of charge but included many free services and had low charges for repositioning an outlet or installing an extension.

Guest

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.

Guest
David Laing says:
21 November 2014

Are Talk Talk not in breach of contract with me – I entered in to an 18 month contract in May 2014
with line rental and calls which would have taken me through to November 2015. Can they actually increase prices on a pre- agreed contract only six months in? I have contacted them but with little response only a young man on the phone to say that can opt out of the contract without charge if i am not satisfied. Not customer friendly at all!! However I am still awaiting an email response.

Guest

As far as I am aware they are not in breach of contract as they do state before you sign up that prices can go up during the term of your contract that’s what they did with me before I signed my contract that response is to the person with talktalk

Guest

Virgin Media is currently the only provider that offers a ‘broadband-only’ deal within its cable network area” – This is incorrect; I have a one gigabit broadband connection from Hyperoptic without a telephone line. Although Hyperoptic offers an optional telephone line that runs over its broadband connection for an additional charge, I chose not to take it. For incoming calls I instead have a virtual 020 number from Flextel, which I receive via VOIPtalk, all for free. For outgoing calls I instead use FreeVoipDeal which costs me €12 every 120 days for unlimited calls to fixed lines in most industrialised countries. I can still make emergency calls on my mobile.

The days of a physical landline are numbered. It’s high time that we move away from carrying the internet over archaic copper telephone lines and instead carry telephone lines over the internet. Fibre should be the norm, not the exception.

Guest

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.

Guest

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.

Guest

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?

Guest

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.

Guest

With the drop in landline calls due to mobile use ,texting and call bundles by phone providers, its not surprising that the cost of the landline itself has risen.
We are moving, as with other utilities, towards more realistic rates for the provision of the copper landline as its no longer neing subsidised by phone calls.

While non-fibre broadband is so integrated with the physical phone lines we are not going to see broadband only rental .
Fibre to the premise for the majority of the country is years away – the infrstructure cost is not commercially viable.

Guest

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.

Guest

@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.

Guest

Thanks NFH. This seems a reasonable assumption.

Guest

Termination rates for calls to 01 and 02 landline numbers are around 0.21p per minute.

More than a decade ago, termination rates for calls to mobile numbers were at least 20p per minute. Since then, they have been steadily falling. Ofcom intervened in the market a few years ago and forced an accelerated reduction. Termination rates for calls to mobile numbers are now around 0.85p per minute and will be subject to a further small reduction in April 2015.

Guest

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.

Guest

Termination rates for 03 numbers appear to be around 0.56p per minute on weekday daytimes, and around 0.26p per minute during weekday evenings and at all times during weekends.

The difference between the termination rates for 03 numbers and those for geographic 01 and 02 numbers is at least partly due to the fact that calls to geographic numbers have far-end handover and calls to non-geographic numbers generally have near-end handover.

Guest

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.

Guest

The termination rate for calls to 03 numbers may be higher but the near-end handover means the transit costs for the originator are lower. Likewise, the termination rate for calls to 01 and 02 numbers may be lower but the far-end handover means the transit costs for the originator are higher. In the end, there’s probably not all that much difference in the overall costs of call origination for each.

The termination rate for calls to mobile numbers is four times that of calls to geographic numbers and yet mobile operators manage to offer large call allowances, even unlimited calls, to both landline and mobile numbers.

The ongoing scandal is that landline operators still massively overcharge for calls to mobile numbers. For example, Virgin Media still charge up to 31p per minute. BT’s best rate (on Home Phone Saver) is still as much as 6p per minute.

With the termination rate for calls to mobile numbers now around 0.84p per minute, landline operators should be able offer a reasonable number of inclusive calls to mobile numbers in their monthly call allowances. The next reduction in the mobile termination rate is scheduled for April 2015 and should bring that reality much closer.

Guest

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.

Guest

Alongside the inflated cost of calling mobile numbers from landlines, nowhere is retail price manipulation more obvious than in the illogical inclusion of calls to 0845 numbers within some of the call packages offered by several landline providers. The Enhanced Termination Rate for calls to 0845 numbers is currently around 1.6p per minute – almost double the Mobile Termination Rate.

The cost of telecoms has plummeted in the last decade. We no longer pay for individual calls to 01, 02 and 03 numbers. Most people call these within the allowances of an inclusive call package on their landline or on their mobile. By now, the same should also apply to calls to mobile numbers from landines.

The “unbundled tariff” will reveal the realities of 084, 087, 09 and 118 call pricing. With the Service Charge exposed and separately declared for what it is, this new found transparency should bring an end to inclusive 0845 and 0870 calls – especially as the Service Charge for 084 numbers will be allowed to be as much as 7p per minute including VAT.

This, coupled with the forthcoming small reduction in MTR should be the moment that inclusive calls to mobile numbers from landlines finally becomes a reality.

Guest
Adam C. says:
30 December 2014

Re: “This … should be the moment that inclusive calls to mobile numbers from landlines finally becomes a reality.”

TalkTalk now offers unlimited calls to both landline and mobile numbers on their “anytime” call plan.

Guest

If Sky and one or two others do the same, the rest will surely follow.

In April 2015 there will be another small reduction in the Mobile Termination Rate.

June 2015 presents an obvious opportunity to stop offering inclusive calls to 0845 and 0870 numbers, and replace these with inclusive calls to mobile numbers.

Guest
Simon says:
2 January 2015

0845 numbers are inclusive calls on many networks. Why wouldn’t they be? When will other networks start including them?

Guest

Following years of complaints about the high cost of calling customer service lines on 0870 and other non-geographic numbers, Ofcom suspended revenue sharing on 0870 numbers on 1 August 2009. Most landline providers, including BT, made these calls inclusive in their call plans. However, consumers gained nothing because most users of 0870 numbers simply swapped to new 0844 or 0871 numbers in order to continue receiving revenue share payments. Additionally, most mobile providers did not drop their 0870 call prices.

At the same time, BT incorrectly anticipated that Ofcom was about to suspend revenue sharing on 0845 numbers. BT therefore decided to also make 0845 calls inclusive in their call plans. Calls to all 084, most 087 (not 0870 at present) and all 09 numbers incur a Service Charge paid to the joint benefit of the called party and their telecoms provider. Where 0845 calls are made inclusive, all call plan subscribers are contributing to those payments whether they call these numbers or not.

Ofcom quickly realised that the changes to 0870 numbers had been a failure and did not proceed with any changes to 0845 numbers. This left BT with a problem. They now had to pay out Service Charge without collecting revenue for each call, a situation that still prevails more than five years later.

On 26 June 2015, 0870 calls will once again return to revenue sharing and all users of 084, 087 and 09 numbers will be required to declare their Service Charge wherever their number is advertised. This will confirm all 084, 087 and 09 numbers as being expensive and will be an ideal time for BT and other providers to stop offering inclusive calls to 0845 and 0870 numbers.

Those users who are unable to justify the imposition of a Service Charge on callers should change their number to one which does not impose it. For those who need just such a non-geographic number, Ofcom made replacement 03 numbers available in 2007. These are inclusive calls from landlines and from mobiles. Take up of these numbers has been slow until the last couple of years.

Recent regulation covers post sales lines for retailers, traders and passenger transport companies and requires them to use 01, 02, 03 or 080 numbers in place of 084, 087 and 09 numbers. Cabinet Office guidance mandates similar terms for government departments and agencies. The FCA will, very belatedly, eventually introduce similar regulation for the financial sector.

Thus, all these changes will largely return 084 and 087 numbers to usage only by those offering a genuine chargeable service. It is only right and proper that only those people who call these numbers should be paying those Service Charges, therefore these calls should not be inclusive in call plans.

Guest

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.

Guest

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.

Guest

With most retailers, traders, passenger transport companies, government departments and agencies, banks and insurance companies now abandoning 0845 and 0870 numbers en masse, you’ll soon have no need to phone these numbers.

When inclusive calls from landlines to 0845 and 0870 numbers are dropped, you’ll not miss them. Calls to the replacement 0345 and 0370 numbers have been inclusive both from landlines and from mobiles since 2007.

Guest

I have this morning been hit with a £39 / year increase:

https://twitter.com/NewtBeaumont/status/537559663517380608
https://twitter.com/NewtBeaumont/status/537562014399606784

Merry Christmas everyone!

Guest

Best of luck to Lee with sorting out these greedy blighters. 🙂

My price rise for phone and broadband has recently risen by a more modest £1 per month. As John Ward pointed out earlier, monthly rises don’t look big, so we should all think in terms of annual charges.

Guest

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.

Guest

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.

Guest

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.

Guest

Elisa Roberts says in her article “Yet other providers still have a mandatory line rental charge – even for fibre broadband which, unlike ADSL broadband, doesn’t use the same copper line used for your voice calls.”
Most so-called fibre broadband is actually FTTC (Fibre To The Cabinet) and DOES use the same copper line used for your voice calls.
Virgin’s cable services also use a copper cable from the cabinet to the home to carry broadband, TV and telephone, but it is a different type of cable and provided by them rather than BT Openreach.
Amongst the major providers, only FTTP (Fibre To The Premises) (also known as FTTH (Fibre To The Home)) services don’t use the copper line, and they are only available in very limited areas at present, and with a very large installation charge.
There are also other providers serving limited areas (such as Hyperoptic referred to above and Gigaclear) who provide FTTP services using entirely their own infrastructure.

Guest

Iv hit a brick wall with sky after getting to retentions and they were bad would not listen to the fact the disabled person the tv and phone is for can’t afford the 64% price increase.bad sky bad.canceled the contract after good mannered haggle.no movement from sky so i canceled as contract is up in 2 months.wonder what they do for disabled folk.to my experience nowt.sad sky.

Guest
Nick Kirk says:
20 December 2014

Presumably these increases have all been approved by Ofcom. I am baffled as to why. Where is the consumer protection here? Is this the price to be paid to encourage BT to invest in the network? It bears down hard on the elderly, who still rely on landlines and don’t use the internet so much to shop around, whereas the youngsters have moved to mobile.

Guest
Yorkymort says:
20 January 2015

It seems to me that most telecom/media supply companies are acting in a similar way to Energy companies in regards to charges, in particular telephone line rentals. One company up’s the rate and the others follow suit in a very short time. I have been with TalkTalk for the past few years and really have had no reason to complain or be unhappy with their products or prices until yesterday.
I normally pay 12 months in advance to take advantage of a 10% discount, in late Dec 2013 I paid £126 ( annual actual cost £140 ) could not believe the cost to renew my 12 months advance line rental yesterday, cost to take advantage of 10% discount was £180 ( actual annual cost £200 ).
The total annual rise without discount was £60,
In this current climate of austerity how can companies justify a 40% plus rise in landline rental costs,until Oftel or the government seriously investigate these charges then it looks like we are stuck with them.

Guest
Razorback73 says:
2 April 2015

I’ve just done the same thing. I’ve emailed them to ask them to justify it. Nearly a 50% increase in 12 months. It’s daylight robbery.

Guest
adrian says:
28 February 2015

Hi Elisa, interested to know where your figure of 6% increase on BT line rental from December 1 came from?
I’ve just had a reminder that my line rental saver is close to the end. The price last year when paying the year’s line rental upfront was 141. This year it is 169. By my maths that’s an increase of more than 16%.
How can this be justified?
Thanks,
Adrian

Guest
Razorback73 says:
2 April 2015

I’ve just checked to pay my value line rental, upfront with TalkTalk, and it seems to have jumped an incredible 45-50%, from around £120 last year, to just over £180 this year (a lot higher than the £126 shown for Nov 2014 in this article). Not sure how that’s value. I’ve emailed them to ask them to justify it. Be interesting to see if they can.

Guest
Sue says:
15 April 2015

A few years ago we just had by phone & line rental package with bt line rental cost £15 99 a quarter (every three months) then two years ago we had a broadband package and bills became monthly, then we noticed our line rental was costing us now £16 99 a month ,what a rip off , bt must now be making a fortune by doing this, why are they allowed too, just ripping off customers again, I would like to no why they can do that, any one no ?

Guest
Sid says:
6 July 2015

Just got the following from PlusNet (who I do rate in general):

” …so on 2nd September 2015, we’re making some changes to our home phone pricing and call charges. The cost of our monthly line rental will increase to £16.99 a month, and you can see the changes listed below.

Save money with Line Rental Saver
We’re making some changes to your Line Rental Saver, which will still save you money on your phone bill when you pay for 12 months line rental in advance. The renewal charge for Line Rental Saver on or after the 2nd September 2015 will increase to £185.88, equivalent to £15.49 a month, which equates to a saving of £18 per year.

…”We hope you’re happy with Plusnet’s award-winning products and services, but if you do decide to leave because of these changes, we won’t apply any early termination charges. All we ask is that you tell us within 30 days of getting this email and give us 14 days’ notice.”

So here’s the rub:
1. I have a contract with Plusnet
2. I pay my line rental annually, equivalent to £12.99 per month.
3. The increase in annual line rental is to the equivalent of £15.49 per month, an increase of £2.50 per month (or 19%).
4. Those paying line rental monthly have an increase from £15.95 to £16.99 per month (£1 per month or 6%)
5. I could cancel my contract, BUT only within 30 days of receipt of the email above. To do so would mean that I would lose any prepaid line rental, as it’s not refundable. So lose-lose.

Come on PlusNet. We know you belong to BT, but you don’t have to behave like them!

Guest

Another ripof by a once state owned company. Consistently pushing up charges and increasing their profit. Once a state owned industry is moved into the public domain it has to make profits for its shareholders. The governments of past years have done us no good in privatising industries which have consistently made profit for shareholders at the expense of both the country and its customers.
This years land line increase is beyond a joke and its`s time the government were enquiring into why these increases are necessary.

Guest

Thinking about it, the Line Rental has increased faster than train fares over the past ten years or so.
If the Train Companies can be regulated on One percent train fare rises, so can the phone companies.

Guest
James says:
7 September 2016

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.

Guest

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.

Guest

The monthly billing is the choice of many BT subscribers you need to apply to get it John .I have been on quarterly bill since I first got a landline phone in (donkey,s years ago ) and I am still on quarterly payments and yes it is DD . But yes BT has just increased all tariffs recently but it is across the board.

Guest

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.