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Are landline price rises fair?

landline

Ofcom has announced that it’s going to review the market for standalone landline telephone services, as it’s concerned that some customers aren’t getting value for money.

Chances are you probably won’t be affected by Ofcom’s review, as many people now have a bundled telecoms package (landline, broadband and TV). But, you may very well know someone who is – particularly if they’re elderly or vulnerable.

Ofcom believes the increase in line rental charges for people who buy landline-only services disproportionately affects these groups, as they are more likely to take a landline without other services. It’s also more likely that they’ve never changed suppliers.

Landline charges

Data from the regulator shows that every major landline provider has put tariffs up significantly in the past few years, some as much as 41%. And that’s despite the fact that wholesale prices for providing the lines have fallen.

Ofcom has found that BT and Virgin Media charge the most for line rental, closely followed by Sky and TalkTalk.

While the regulator doesn’t have competition concerns about bundled telecoms packages, there is a real worry that there are a sizable number of consumers out there who aren’t getting a fair deal if they’re paying solely for a landline service.

In fact, it’s reported that around 2.7 million households only have a landline, with no access to other means of communications, such as broadband for email or a mobile phone. This was backed up by a convo we ran in the summer, when we asked if you think your landline is still a lifeline, considering the rise in mobile phone usage.

And for people like Alan, it definitely still is. He told us:

‘Those of us living in the countryside (less than four miles outside of a town) have to suffer the problems of totally rubbish broadband speeds and also virtually nil mobile phone (unless you want to hang out of the window waving your mobile around). So for millions of us the landline is invaluable and will be for a long time yet as the telecoms industry is only interested in urban areas.’

Next steps

The regulator has started its investigation and opened a consultation, which will close at the end of February.

Which? welcomes this move from Ofcom, and will be looking to help it during its consultation in whatever way we can.

So, do you have a landline-only service, or do you know anyone who does? What do you think to landline-rental charges? What should Ofcom consider in its consultation?

Comments
Member

I’ve long held the view that those of us choosing a single item are penalised for not being a good little cash cow.

Member

I’m always reminded of a friend of mine who had his landline, internet and mobile all in one package. When he tried to switch providers his old provider cut him off a fortnight early so he was without any form of communication for those two weeks.

It might not have been so bad had he not been self-employed.

Member

While William could have a point the question arises -what is the biggest source of maintenance expenditure ? . It isnt broadband maintenance allowing TV and other resources to be used but the maintenance of a telephone landline , I should know I worked repairing them for 19 years , it is labour intensive . Long ago there were big storms in the London area pulling down BT equipment-poles etc to repair them many BT engineers were drafted in from various parts of the British Islands it took a while to do . Now BT is VERY understaffed due to government action which slyly forced BT to employ private contractors -Exactly what HMG wanted , so my question is the same as the issue over fibre -FTTP -WHO PAYS ?? AND if another storm occurs in London its going to be in serious trouble because of lack of engineers . This isnt just me saying that there is a “big kick up ” in telecommunications circles about this going on just now. Okay lets hear the SOLUTIONS ?

Member
D Batki says:
8 December 2016

Thank you for the reasons for the charges for land-lines. Why does BT continue to use poles in many streets? Why has the company not invested in Fibre Optic lines ? I am a Virgin Media customer who pays the extra for the landline rentals because the Mobile service can be unreliable in the Cotswolds.

Member

D Batki -if you are a Virgin Media customer you will not be using BT underground cables/ducting–they have their own , Virgin Media have their own co-ax and Fibre cables so if you are paying extra for your landline its not BT,s fault but Virgin,s . BT continues to use poles because they have already outlayed vast sums of money for their installation , do you know it requires a gang of men + a hydraulic crane + a mechanical digger just to install one pole , do you know how much that costs ? Now just imagine iof BT had to dig up EVERY street in Britain to install underground cable , not just that but you are talking Direct Feed that means EACH house in Britain would need to be individually dug up through their gardens PLUS how do you get Wayleave to go through other peoples gardens/ land ? think of the cost ,it would be Hundred,s of BIllions –several £100 BILLION pounds , what you are advocating is not possible given the liabilities of BT , why not ask the IMF for the money or the WB etc or a certain Billionaire-GS ? Can you see other companies using BT ,s network by piggy backing it to contribute the odd £10 Billion or so ?? — I dont.

Member

I totally agree with Duncan Lucas I did 39 years with BT and all it came down to was cutting the costs and one of the best ways to do it was by getting rid of all the experienced telecoms engineers who knew the most about how the network functioned when I started with the GPO my particular group had about 30 engineers in the area we looked after, when I left my group was down to 4 to do the same amount of work.

Member

I think this review is well overdue. Not only have the landline-only prices of the major telecom service providers risen continuously over recent years but they have converged so that there is no effective competition on price. Moreover, the gap between the consumer charge and the declining wholesale cost of landline provision has widened considerably for no apparent reason other than an unfounded contention that providing a landline service is uneconomic without add-ons like broadband. I somehow don’t suppose I shall require a broadband service all the way until the end of my life and that a landline-only service would eventually be sufficient; this could be the situation for large numbers of people so tackling this overpricing, and challenging the justification for it, are essential.

Member

I wonder how much the increase in landline rental costs is due to the huge loss of income from landline phone call charges. Many use mobiles of course, and many others have free calls included in the rental. Would we prefer to pay for all landline calls as we used to and have lower line rentals?