BT Group plc (LON:BT.A) has welcomed “a balanced voluntary agreement” with regulator Ofcom which means that up to 1mln its customers who don’t have broadband will receive a substantial cut in the price of their line rental from April 2018.
In a statement the FTSE 100-listed telecoms group said: “We have listened to the concerns of our line-only customers and agreed to reduce the price of line rental for them by £7 a month, or £84 a year, which means they will only pay £11.99 a month for standard line rental.”
READ: Government intervenes in dispute between BT's Openreach and Ofcom over wholesale prices
It added: ““This will come in to effect from April 2018 for all landline-only customers who just take phone services from us and don’t have broadband (either with BT or someone else).”
In its own statement, the regulator said: “Ofcom has been concerned that telephone line rental prices have risen, despite wholesale costs falling.”
It added: “Of the UK's 1.5mln landline-only customers, two thirds are with BT. This position has allowed BT to increase prices without much risk of losing customers, and other providers have followed BT's pricing lead.”
Ofcom added that it also wants to help people who buy a telephone service from one provider and broadband from another.
READ: No doubt BT is a value play, but watch out for a dividend cut in next week’s Q2 update
The regulator said: “While the price cut will not apply to this group, the agreement requires BT to help these customers take advantage of the deals on offer in the market, by explaining that they could get a better deal if they purchased services as part of a bundle.”
Separately, Ofcom said, it is examining measures to help people shop around with more confidence, so they can take full advantage of the wide choice of competitive services.
It added: “We will continue to keep a close eye on the market, to ensure BT's actions address the problems we have identified. If we have any concerns about consumers or competition, we will consider the need for further intervention.”
Commenting on the news, Richard Neudegg, head of regulation at uSwitch.com, says: "BT's voluntary agreement to cut bills for these customers at the upper end of Ofcom's proposal is especially laudable in light of the fact landline-only services are usually taken by more vulnerable - particularly elderly - customers.”
He added: "This group of customers who don't have broadband have lost out in recent years as the shift in competition in fixed telecoms has overlooked voice-only services in favour of broadband."For many of these customers the landline is seen as a lifeline, so this is a welcome move."
In afternoon trading, BT shares were 0.5% higher at 266.35p.
-- Updates share price --