Following pressure from the regulator which is aiming to protect the elderly and vulnerable people, Britain’s BT has agreed to slash the amount that it charges customers who only use a landline service by 37%.
Ofcom had raised concerns regarding the price that the dominant telecoms provider in the country charged landline-only customers after determining that part of the market was not functioning properly.
BT stated that as a result of its agreement with Ofcom, approximately 1 million of its customers would observe their monthly bill decrease from April 2018.
Line rental will decrease from 18.99 pounds to 11.99 pounds a month, reducing the annual cost by 84 pounds a year.
Future call costs and line rental will be capped at the rate of inflation.
Ofcom believes that those customers most likely to take only a landline are the elderly or vulnerable who depend on the service and who are not likely to shop around for a deal that is better.
“Of the UK’s 1.5 million landline-only customers, two-thirds are with BT,” said Ofcom in a statement. “This position has allowed BT to increase prices without much risk of losing customers, and other providers have followed BT’s pricing lead.
“We expect BT’s 7-pound price cut to mean other providers can follow suit.”
Ofcom stated that it would keep a close eye on the market in the future to check whether it was working properly.