Economy

Ofcom: BT will cut phone bills by 37pc to protect pensioners

Which? managing director of home products and services Alex Neill said: "Today's announcement will be welcome news to those BT landline-only customers who will now see a cut to their phone bills".

BT has agreed to reduce bills for up to one million telephone customers by £84 each year following talks with the communications regulator.

Ofcom believes that those customers most likely to take just a landline are the elderly or vulnerable who rely on the service and who are unlikely to shop around for a better deal.

The regulator said it was concerned about a lack of competition in the market as two thirds of all landline-only customers are with BT.

Ofcom expects other providers to follow suit.

BT's decision to cut monthly line rental price by £7 follows Ofcom's review and strong instruction to the top operator to slash the price of landphone charges for its customers who take only a landline from BT.

BT are said to have made the moved voluntarily following recommendations from the regulator. 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%.

"This group of customers who don't have broadband have lost out in recent years as the shift in competition in fixed telecoms has overlooked voice-only services in favour of broadband".

Future line rental and call costs will be capped at the rate of inflation.

BT's landline-only customers now pay £18.99 a month, but from April next year this will drop to £11.99 (similar to how much it cost in 2009).

"But households who only have a landline - and no broadband - have seen their phone bills soar", he added.

"For many people, their landline is their lifeline".

"We already offer low income customers on certain benefits a special tariff called "BT Basic" and also offer Home Phone Saver that provides a great value bundle for customers who want a traditional phone service, with Anytime calls and other benefits".

UK's telecom industry is now watching for the response from BT rivals after BT's decision to cut monthly line rental price by £7.



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