Ofcom probing rises in standalone landline phone prices
Ofcom has launched a review of standalone landline prices over concerns that the elderly and vulnerable are being particularly affected by rising costs.
The regulator said all major landline providers had increased line rental charges by between 28% and 41% in recent years, despite the wholesale cost of providing the service falling 25%.
Market leader BT and Virgin Media had the highest line rental charges, with TalkTalk and Sky not far behind, Ofcom said.
It said the price increases were felt most acutely by customers with a standalone landline service - those who do not have broadband or a pay-TV deal and who do not benefit from strong competition for bundled packages.
Ofcom found that elderly and vulnerable people, who make up a significant proportion of standalone landline customers in the UK, were particularly affected by price rises.
They were often "very reliant" on their landline and more likely than most to have stayed with the same phone company all their life.
Ofcom's competition group director Jonathan Oxley said: "Our evidence shows that landline providers have been raising the price of line rental, even as their costs have been coming down.
"We're particularly concerned for older and vulnerable customers, who rely on their landline and are less likely to change provider. So we're reviewing this market to ensure these customers are protected and getting value for money."
It expects to publish a consultation early next year.
Digital Minister Matt Hancock said: " Landlines are an essential service for thousands of households across the country, but especially for elderly and vulnerable people who are more reliant on their home phones.
"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."