Culture secretary Nadine Dorries is to hold talks with some of Britain’s largest telecom companies, including BT Group PLC (LSE:BT.A) and Vodafone Group PLC (LSE:VOD), to encourage private sector bosses into addressing the cost-of-living crisis.
According to Sky News, Dorries will press the businesses into coming up with practical ideas to ease the squeeze on the living costs for their customers.
Possible solutions mentioned by sources familiar with the matter include mass-market pricing, the provision of payment holidays or social tariffs, which could help cash-strapped customers.
Berenberg notes that while the call may scare some within the telecoms business, ultimately the aim is to help the vulnerable.
Analysts at the firm suggest that the focus will firmly be on helping those who need it, rather than “changing mass-market pricing dynamics.”
Recently, big telecoms business have increased prices, adding further strain to customers' pockets, with Berenberg adding much of its discussions with investors centre on the “sustainability, and political acceptability, of this pricing dynamic.”
In terms of improving social tariffs, Ofcom is already currently applying pressure on operators, with its reporting in February showing that of the 4.2mln households on universal credit, only 55,000 had taken advantage of discounted broadband packages.
Berenberg also warns that mass-market pricing could damage investment in the sector.
“We believe that the UK telecom operators would have a strong argument that mass-market pricing intervention would reduce investment levels, damaging the UK’s international competitiveness,” analysts said.