Ofcom has said that in order to protect the elderly and vulnerable it plans to force BT (LON:BT.A) to cut bills by at least five pounds a month for customers who rely only on a landline service.
The British telecom regulator will also propose safeguard measures to prevent the telecoms provider from hiking costs by more than future inflation.
“So Ofcom intends to give customers with standalone landline contracts additional protection by cutting the cost of BT’s line rental by at least £5 per month – or £60 per year,” the regulator said.
“Line rental has been going up, even as providers’ costs come down,” Ofcom Chief Executive Sharon White said. “This hurts people who rely on their landline the most, and are less likely to shop around for a better deal. We think that’s unacceptable.”
Under the current plan, customers with only the landline package will see bills fall from 18.99 pounds per month to 13.99 pounds.
The regulator said landline-only customers tend to be most affected by price hikes in telephone line rental.
It said that some providers had increased line rental charges by 25-49 percent in recent years, even though the wholesale cost of providing the service had actually fallen by around 26 percent over the same period.
“Unlike other companies, [we] have many customers on special tariffs for socially excluded or vulnerable customers,” BT said. “Recently, we have frozen the cost of line rental for all of our customers who take a BT phone line.”
The telecoms giant said it would “respond to Ofcom’s consultation fully when we have considered the detail”.
According to Ofcom, the average landline-only customer has been with their provider for over 20 years. 43 percent of customers with a standalone landline contract are 75 years or over and 70 percent of landline-only customers have never switched provider.
The regulator launched its review of landline phone prices in December.