Ofcom to examine landline prices

All major landline providers in the UK have increased their line rental charges significantly in recent years, according to Ofcom.

The telecoms regulator announced on Thursday that it will review the retail market for standalone landline telephone services, to ensure that customers receive value for money.

Ofcom’s analysis shows that line rental fees have increased by up to 41% in real terms since 2010, while wholesale costs have fallen by a quarter. Customers of Sky and Virgin Media have seen the biggest price rises.

Ofcom said it is concerned that people who buy landline services on their own — those who do not have broadband or a pay-TV service — are not being served well by the market. They do not benefit from strong competition in the market for ‘bundled’ communications — where landline, broadband and sometimes pay-TV services are packaged together.

Elderly and vulnerable people represent a significant proportion of ‘standalone’ landline customers in the UK, and are particularly affected by price rises.

They are often very reliant on their landline, and are less likely to change provider, Ofcom said.

Its review aims to establish whether measures are needed to protect this group of customers.

An estimated 10% of households in the UK do not have broadband packages, which means that about two million homes rely on landlines or mobiles. Around one million are completely dependent on landlines, according to BBC News.

Digital minister Matt Hancock, quoted by the BBC, said: “It cannot be right that these customers are paying over the odds and I am pleased that Ofcom is taking action on this important issue.

“The Government is clear that action should be taken where consumers are not getting a good deal, which is why we are launching a Green Paper next year to examine markets which are not working fairly.”