Almost a million BT customers who have only a landline without any broadband will see their monthly phone bill cut by £7 from Sunday after an investigation by the regulator.
The move – which will reduce standard line rental to £11.99 a month – will mainly affect elderly and vulnerable customers deals. Landline-only customers have previously not received the same value for money as those who buy bundles of landline, broadband and/or pay-TV services. Two-thirds of landline-only purchasers are over 65.
Of the UK’s 1.5 million landline-only customers, two-thirds are with BT. Ofcom said that this position had allowed BT to increase prices without much risk of losing customers.
The discount will automatically apply to 700,000 BT customers, while a further 190,000 who receive paperless bills will be contacted by BT to see if they are eligible.
Jonathan Oxley, Ofcom’s competition group director, said he hoped other providers would follow suit.
Post Office, which serves the second largest share of the landline-only market after BT, is to offer a new price of £11.50 from May.
Mr Oxley said: “We had serious concerns about soaring bills for loyal landline customers. This was hurting people who rely on their landline, many of whom are elderly. We’re pleased that BT has cut prices.
Consumer groups welcomed the move, which came after Ofcom investigated rising prices in the sector last year.
It found that all major landline providers had increased their line rental charges significantly in recent years – by between 23 per cent and 47 per cent in real terms.
This is despite them benefitting from a 27 per cent fall in the underlying wholesale cost of providing the service.
Richard Neudegg, head of regulation at uSwitch.com, said: “BT volunteered to implement the cut for these customers without broadband at a rate sitting at the upper end of Ofcom’s proposal, which is laudable given landline-only services are typically taken by more vulnerable – particularly elderly – customers.
“In recent years, this group of customers have lost out as the shift in competition in fixed telecoms has overlooked voice-only services in favour of broadband.”
Alex Neill, managing director of home products and services at Which?, said: “Ofcom should continue to do more to boost transparency and fairness in the telecoms markets, encouraging customers to switch and ensure they can access the right deal for them.”
A spokesman for BT said: “We welcome the fact that up to 900,000 of our customers who don’t have broadband will receive a substantial reduction in the price of their line rental from 1 April 2018.”
New customers and any customers who switch to BT solely for a phone line will also be charged the lower price.