Could Goverment pressure mean an end to voice line rental?
The cost of voice line rental at the retail level has continued to increase year on year for some years and diverge from the actual wholesale cost. The reductions in line rental at the wholesale level being the result of regulation by Ofcom and are in themselves a matter for discussion since the pressure to improve fault repair and service levels in Openreach may start to lead to them increasing.
The Culture Minister Ed Vaizey appears to be bypassing the traditional Ofcom regulation path and is asking for round table discussions before Parliament breaks up for the summer so that a solution can thrashed out that will mean those who don't make use of the land line for telephone calls do not need to pay the typically £15 to £18 line rental cost. Ofcom and the ASA are already moving to revising the rules around how broadband packages can be advertised and insisting that voice line rental be rolled into the broadband package cost where it is part of a bundle.
Not paying voice line rental if you make no phone calls would be a massive vote winner, but given that xDSL broadband is reliant on at least some copper loop means something needs to be charged for that element. The debate about naked DSL i.e. where you pay only for the broadband surfaces at least annually, and to some extent the soon to launch at the retail level SOGEA FTTC product which will cover the VDSL2 and copper loop elements in a single product is an industry reaction, no pricing is available yet, but we expect SOGEA to cost less than an existing up to 38 Mbps VDSL2 service when combined with the retail price of voice line rental, not a full £17.99/month less but may save people £3 to £5 per month. The SOGEA product expected is likely to still include a voice service but delivered as a VoIP product but presented in a way that works with traditional telephones.
We believe the reason the voice line rental has bucked the trend in reductions at the wholesale level is that the revenue and thus profit from voice line calls has plummeted in the last decade, driven by people making good use of call bundles and the way that communications is changing with social media replacing the old fashioned gossip phone call.