Ofcom may take action on increasing line rental prices
With the broadband USO going through the slow process to law it seems a good time to review things like the pricing of phone lines for those that don't have a broadband service and particularly the elderly and vulnerable.
Ofcom has announced a consultation on a landline price review, regular readers will know that in the past when line rental pricing was visible we would often highlight when it rose in price that the wholesale element had remained steady or had dropped. An additional point is that some operators have reduced the care level applicable (in this case it means repairs may be a day slower) to phone lines they rent, thus saving a small amount of money per line while in many cases the retail line rental price still increased.
The email sent out at 7am today contained the paragraph 'The consultation relates to wholesale prices that BT can charge other telecoms providers to offer homes and businesses a telephone service over its copper network. We are seeking views on our proposed wholesale regulations by 28 February 2017' which seems a little odd given the downward trend in wholesale costs, but the full article suggests that an across the board price cut at wholesale or enforced margin rules at retail are not under consideration but rather 'Ofcom’s review will establish whether measures are needed to protect this group of customers. We are now analysing the market in detail and, depending on our findings, we expect to publish a consultation in early 2017.
The existing telephone USO means BT provide a Basic Telephone and broadband product with means testing for those on the lowest incomes, and at £5.10/m (including £1.50 of call allowance) this is below cost (£7.22/m + VAT), so one option may be to extend the group eligible for the product. Though at a time when the telecoms market is undergoing potentially massive upheaval the BT Group may not be keen to shoulder the full responsibility.