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£1 added to Sky voice line rental
Monday 05 October 2015 10:22:29 by Andrew Ferguson

Sky announced quietly over the weekend a voice line rental increase raising the cost of voice line to £17.40 per month for customers. Existing customers affected by the increase should get the notification letters soon and the usual option to exit their contract early be provided, though as Sky is one of the last major providers to increase its prices this year they may not like what they see elsewhere. Of course as always there are smaller providers offering line rental at a lower price, but this is often balanced out by the cost of the broadband or other factors.

How voice line rental prices are changing
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While the big spotlight is on the break-up of Openreach for the majority of consumers the much bigger question is why is the retail price of voice line rental continuing to diverge further and further away from what Openreach actually charge the providers.

Virgin Media is the last of the big four providers and with its voice service totally separate from any Openreach infrastructure they should be able trying to win customers by maintaining the lowest voice line rental prices.

2015 as well as following the year on year pattern for line rental increases has seen Sky and TalkTalk increase their ADSL2+ package pricing too, though for those willing to switch providers the value of deals for switching has also improved and this may explain why Ofcom is not acting to investigate what some end-users feel is a rip-off, i.e. Ofcom wants a market where broadband switching is encouraged.

2015 has also seen some of the call bundles that came with voice line rental get smaller (e.g. no inclusive calls or weekend only calls rather than evening and weekend) and call/connection charges rise. This package erosion are probably all side effects of providers trying to keep the ARPU (Average Revenue Per Unit) stable and with less chargeable voice calls made each year the profit from calls is gradually being shifted onto the basic line rental service.

There is a data-only line option on its way for the Openreach FTTC product range, but still no sign of pricing or a launch date. This product when launched will not provide a copper connection supporting voice back to the exchange, and is called Single Order GEA with the provider paying just a single price and is the closest thing to naked DSL that has existed in the UK.


Posted by generallee94 about 1 year ago
I'm liking the sound of SOGEA and personally think this may be a welcomed change for many of us, do keep us in the loop please :)
Posted by TheEulerID about 1 year ago
It's about time that it stopped being called "voice line rental". It's a wholly misleading terms as it gives the impression that what's being paid for is the voice service. It's really not - Sky buy the MPF product.
As for competing on fixed line voice, that's a product in long term revenue decline as it loses out to mobile and VoiP alternatives.
Posted by cks22 about 1 year ago
Much the same for everything these days.

If you take the 2 supermarkets near me and watch their petrol and diesel prices closely you will see whatever supermarket puts a penny on a litre first the other ( a mile away) will do the same within an hour and this happens with price increases and decrease but they tell us there is no price fixing.
Posted by cks22 about 1 year ago
Won’t the SOGEA be like I’ve got with Virgin Media broadband only where the line rental is still in there but hidden?

I’m not a fool who believes I’m just paying for BB with no line rental even if it is a few pence cheaper.
Posted by Michael_Chare about 1 year ago
So the cost to the consumer has risen at a time when the cost to the provider has fallen. Competition does not appear to be reducing end user cost.
Posted by TheEulerID about 1 year ago

Only one cost is decreasing (in real terms) in the form of LLU. However, ISPs are having to deal with ever increasing data volumes which means a lot of expenditure on upgrading their networks. Then there are increased marketing costs (the corollary of Ofcom encouraging retail switching). Then there's declining voice revenues. Line rental just needs to be seen as part of the whole cost - it's not a separate thing at all.
Posted by TheEulerID about 1 year ago
Incidentally, what a lot of people may have missed is the strategic connection between Single Order GEA and BT's application in June to remove the obligation to deliver tradition voice services within 10 years.

If voice were to be delivered over BB, it would potentially remove a lot of cost by closing many telephone exchanges and removing the need for the "E side" copper network.

Of course the implication is GEA would rule. Goodbye LLU/WLR.
Posted by TheEulerID about 1 year ago
Oops - that ought to have been MPF/WLR.
Posted by WWWombat about 1 year ago
BT have made an official application?

I've only ever seen statements of hope, desire, intentions or grand predictions.

The closest has been business media reports detailing the implications to the ISDN access network.

But an official application? I haven't seen that yet...
Posted by 21again about 1 year ago
> Ofcom is not acting to investigate what some end-users feel is a rip-off

Is that part of their remit?
Posted by Michael_Chare about 1 year ago
The BT line rental cost is paid be everyone with a BT phone, regardless of whether they have broadband. The price has risen dispite the cost to the supplier reducing.
Posted by TheEulerID about 1 year ago

The point I'm making is that the any connection between what appears on a retail bill as "line rental" and what the SP pays Openreach is tenuous. It might suit SPs to call it that, but it's just part of the package pricing and just how SPs care to itemise it is, to a large extent, arbitrary. It happens to suit to raise the LR element simply because they can keep the headline BB price down.

That's not to say WLR & MPF aren't real costs of course, but the SPs are using LR to recover other costs too.
Posted by TheEulerID about 1 year ago

I'm not sure if it's formal, but that's clearly the direction of travel. Of course there's a big question whether VOIP & Mobile are as robust, but as people seem to want to move away from fixed line calls the revenue to support it all is in long term decline. Witness the constant complaints about line rental costs which pay for the great majority of this.
Posted by kijoma about 1 year ago
Open networks , funded for the very purpose they encourage competition.. or price parity fixing.. Take your pick..

As for VoIP , it is robust and if you use one of the providers NOT reliant on the above infrastructure then line rental is a thing of the past, as are constant price increases.

Evidence can be provided, as always.
Posted by rtho782 about 1 year ago
While the whole cross subsidy annoys me, and I'd rather see honest pricing, it's unsurprising when Joe Consumer expects free broadband for 12 months with £100 quidco cashback.

SOGEA won't solve it, it will just mean we get broadband for £2.50 with £17.50 line rental, or broadband only for £19. Will seem like a £1 a month saving except that the first option will give you 18 months free broadband and free activation while the 2nd will have no offers and a £50 activation charge.

Posted by rtho782 about 1 year ago
The real solution is for Ofcom to ban bundle lock ins. If TalkTalk want to advertise broadband for £2.50, I should not be required to have line rental with them. This opens up competition for both products and forces standalone pricing for both products.
Posted by csimon about 1 year ago
^^^ <Like>
Posted by csimon about 1 year ago
...however, this will probably result in individual products being priced higher than they would normally be and all providers will follow suit with similar price rises anyway on the individual products. The whole thing is quite broken.
Posted by DeadMetaphor about 1 year ago
Sky are also increasing the international calling plan which is going to hurt as we make lots of calls to family in France. The international package was £ 5 when I signed up two years ago, it jumped to £ 10 last year (which I managed to avoid) and it’ll now reach £ 12! It's cheaper to call abroad on a mobile. Time to look at internet without a landline and VOIP I think, does anyone have any recommendations?
Posted by andrew (Favicon staff member) about 1 year ago
I have Skype USA dialling - family in US £40 or so per year. So just need Internet connection and can call, also handy when in the US and outside the 3G foot print as just head to a McDonalds to use their WiFi and make calls.
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