Home phone News

Ofcom proposes UK line rental price cuts

Monday 6 February, 2012

By Anthony Hill

Reduced wholesale charges could mean cheaper home phone bills.

Ofcom has proposed cutting the prices BT can charge other home phone providers for access to its UK network.

The regulator controls how much Openreach, BT’s wholesale access division, is allowed to charge providers using its infrastructure. Line rental charges are regulated because Openreach is deemed to have “significant market power” in delivery of communication services.

If the draft proposals were approved, the annual price of a fully “unbundled” line to a property would drop from £91.50 to £87.41. An unbundled property is one where a provider - such as Sky, TalkTalk or O2 – takes over the line to provide home phone and broadband services.

Lines used only for telephone would cost £98.81, compared with the current wholesale line rental of £103.68 a year. Meanwhile, a line used solely for broadband will drop from £14.70 to just £11.92 if the changes go ahead.

Although the proposed changes apply to wholesale line rental -the price paid by providers rather than their customers - they could potentially benefit the end user too. For example, the savings might be passed onto customers by way of cheaper line rental or reduced call charges.

A spokesperson for Sky said: “Whilst it’s too early to comment on the specifics of these draft proposals, we continue to work with Ofcom and the rest of the industry to help create the right framework to deliver more choice and quality for consumers.”

The new prices, the third set since Openreach was created in 2006, will be submitted to the European Commission for review. Ofcom expects to publish a final decision in March.