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Britain's telecoms giants to be probed by Ofcom over landline pricing

Oliver Gill
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Ofcom wants vulnerable customers to be protected (Source: Getty)

The UK's phone companies are exploiting vulnerable people by hiking landline prices even though their costs are falling.

Regulator Ofcom delivered a damning verdict on the likes of BT and Virgin Media and announced plans of a detailed review of pricing to ensure customers get value for money.

Read more: Ofcom will go to European Commission to legally separate BT and Openreach

The analysis by the telecoms watchdog reveals all major landline providers have ramped up their line rental charges significantly in recent years – by between 28 per cent and 41 per cent in real terms.

However, their cost to deliver the services has plummeted – there has been a 25 per cent fall in the underlying wholesale cost of providing a landline service.


Landline prices go up while Telecoms costs go down (Source: Ofcom)

“Our evidence shows that landline providers have been raising the price of line rental, even as their costs have been coming down," said Jonathan Oxley, Ofcom’s competition group director.

We’re particularly concerned for older and vulnerable customers, who rely on their landline and are less likely to change provider. So we’re reviewing this market to ensure these customers are protected and getting value for money.

Read more: Vodafone fined £4.6m for taking customers' money and service failings

The key, according to the Ofcom analysis, was companies are eager to sell a bundle telecoms services together. Real prices for overall telecoms cost fell between 2010 and 2014, although they jumped back up in 2015.

But for those just wanting a landline service, such as the elderly – who are also less likely to switch provider – there is the danger they are being adversely impacted.

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