Last week, Ofcom announced that they will be conducting a review into price rises in standalone landline phone services.
This review is both welcome and significantly overdue. Elderly and vulnerable people make up a significant portion of standalone landline customers, and are most affected by these price rises.
Ofcom analysis has shown that every major landline company has increased their line rental charges significantly, despite decreases in the cost of providing the service. Since 2010, the cost of a standalone landline rental has increased between 28% and 41% in real terms, despite a 25% fall in the underlying wholesale cost of providing the service for landline companies.
While there is strong market competition for bundled packages for TV, telephone, and internet services, which helps to keep prices down, there is little competition amongst providers for standalone landline services.
Media reports state that BT and Virgin Media have the highest line-rental charges, with TalkTalk and Sky trailing closely beheld.
Ofcom believe that this disproportionate rise in the cost of standalone landline phone services may be reflective of the decline in revenue from landline calls. If this is the case, it would mean that older and more vulnerable people have to bear the brunt of the repercussions of changes in the telecoms market.
Older and vulnerable people are often very reliant on their landline services. I welcome the steps by Ofgem to investigate if, and how, these customers should be protected in the future.
