Telecom regulator Ofcom is to investigate landline rental prices after substantial increase in real terms by all the main suppliers in recent years.
Shares in telecoms group TalkTalk (LON:TALK) fell almost 4% on the announcement to 154.2p.
The regulator said it was concerned by the increase in charges over the past six years, with Sky’s charges rising by 41% and the lowest rise 28%.
Over the same period, the underlying wholesale cost of providing a landline service had fallen by 25% said Ofcom.
Virgin Media and BT (LON:BT.A) are the most expensive landline providers with a monthly rental charge of around £19.
BT saw its share price dip 1% to 353.8p. Earlier this week it was told by the regulator to move network arm Openreach into a separate subsidiary.
Most telecom companies include the line rental charge as part of another service such as broadband or pay TV, but this leaves some groups exposed to higher costs said the regulator.
"Our evidence shows that landline providers have been raising the price of line rental, even as their costs have been coming down,” said Jonathan Oxley, Ofcom's competition group director.
"We're particularly concerned for older and vulnerable customers, who rely on their landline and are less likely to change provider.”
Mike van Dulken, Head of Research at Accendo Markets, added: “It is widely accepted that the highly competitive UK telco market uses inflated landline charges to subsidise cheap calls, broadband and now even TV, services which are in certain cases offered almost gratis in order to encourage customers to switch.”
Van Dulken added a model focused almost solely on new subscriber stats penalises those who use a landline for calls and nothing else.