BT customers who do not use television or internet will be billed no more than £11.99 under Ofcom proposals
Around one million BT landline customers could soon see their bills slashed by £84 a year.
Under plans expected to be announced today by telecoms watchdog Ofcom, BT customers who do not pay for internet or television would be billed no more than £11.99 a month for their landline.
This is a £7 a month saving on the £18.99 they pay for their home phone at present – reducing their bills by more than a third.
Most customers who only have a landline are elderly or vulnerable.
They have typically been with the same provider – usually BT – for decades and are likely to be overpaying as a result.
Earlier this year an investigation by Ofcom found that customers on landline-only deals are getting poor value for money following a series of price hikes over the past few years.
In February, Ofcom said that it was consulting on plans to reduce these customer’s monthly bills by at least £5 a month – £60 a year.
It said that BT’s market power has allowed it to increase prices without much risk of losing customers.
Other providers have then followed BT’s lead, increasing costs for everyone.
The saving expected to be revealed today is higher than first thought at £7 a month – £84 a year – but fewer people are set to benefit.
Under the original proposal it was estimated that two million customers would see their bills reduced but this number is understood to have been halved to around one million.
It is believed this is because customers who only have a landline with BT but also pay for broadband or TV with another firm will not benefit, as first thought.
The price cut should return the cost of line rental to 2009 levels in real terms, effectively reversing price hikes for landline-only customers.
Only BT customers will see their bills reduced, leaving thousands of customers with standalone landline contracts with other providers such as Post Office or Virgin Media still paying higher rates.
Earlier this year an investigation by Ofcom found that customers on landline-only deals are getting poor value for money following a series of price hikes (file image)
However, Ofcom said in February that it hopes the move will encourage other firms to follow suit and cut their prices.
Ofcom also proposed measures earlier this year to prevent BT from hiking line rental and landline call costs by more than inflation in the future.
It is not yet known if the move will go ahead.
James Walker, chief executive of complaints service Resolver, said: ‘This is great news for the hundreds of thousands of people who have been trapped in expensive and unfair deals for far too long.
‘People overpaying for landline charges often tend to be older or more vulnerable so it is about time they are finally getting something back for years of loyalty to BT.
‘However, there are still many people who won’t benefit so customers need to switch to save – loyalty is rarely rewarded by big businesses.’
David Hickson, of Fair Telecoms campaign, said: ‘We’re delighted that Ofcom is going ahead with this necessary move to cut away at the exploitation of BT’s strong market position. It is regrettable but necessary.’
On average, landline-only customers have been with their provider for more than 20 years, compared to eight years for phone with broadband customers, according to Ofcom. Around 43 per cent of customers with a standalone landline contract are 75 or over.
At £11.99 a month BT would be the cheapest landline-only deal on the market. Post Office currently charges £15 a month for the first year and £16.99 a month thereafter. It is not thought the price cut will be backdated.