BT Line Rental Price Change - unfair competition?

  georgemac 09:20 12 Jun 2004
Locked

I have just recieved my monthly phone bill from BT, outilining the increase in line rental but making inclusive for everyone BT together Option 1 which reduces the cost of national daytime calls to 3p per minute, and for local calls off peak, 5p per call for up to 1 hour.

Now I don't dispute that this is a nice package, but as I buy my telephone service from another company and only pay line rental to BT, it is a service I do not want and will not use, so why should I be forced to pay for it, and in effect subsidise other BT customers.

If I was the chief executive of another telecoms company, I would be complaining very strongly about this, as I believe this would discourage people from leaving BT and migrating to another company and therfore discouraging competition.

I can understand why BT have done this, as their duty is to their shareholders to maximise their customer base and profits.

I cannot understand why the regulator, Ofcom has allowed BT to do this. I also note that some of the other prices charged by BT (ringback - 50% & others) have increased by much more than the rate of inflation. Again BT profits were quite healthy the last time I looked so I cannot understand why the regulator has allowed this.

I think that as we have no choice but to use a BT line, they should be forced to provide a basic line rental only option, with no inclusive calls or options, to encourage competition.

With the increasing take up of broadband, BT will also be collecting 2 lots of line rental for the same line, altough I appreciate they have to recover the large sums invested in the new equipment required to upgrade the exchanges.

Just interested in the opinions of others, to see if mine is a common view?

I have emailed a complaint to Ofcom, not that I think it will do any good.

  Stuartli 09:59 12 Jun 2004

BT provides and maintains the infrastructure for its phone services and the line rental charge is payment for you being able to access it.

If you choose to select a cheaper outlet for your phone calls, you cannot expect BT to provide the telephone line for you to do so free of charge.

It's a case of swings and roundabouts; BT makes its spare calls capacity available to your cheaper supplier which, in turn, sells it to you at a price that enables it to make a profit.

If you look at it logically, you gain cheaper phone calls, BT sells off spare calls capacity and your cheap supplier, with minimum investment, makes a profit using the resources of a telecoms specialist.

  Sir Radfordin 10:23 12 Jun 2004

As Stuartli says BT provide and maintain the infrastructure of the phone service. BT is now a collection of companies that appear to operate on an independent basis either because of poor internal communication or because they really are seperate entities.

The same is true of the gas/electricity/water networks. The infrastructure is provided by one company who then 'lease' it to others to supply services down. It is only because you don't pay 'pipe' rental that you don't see this in your bill. The price you pay for gas/electric/water will include the rental of the pipes/wires that deliver it to your house.

  georgemac 11:57 12 Jun 2004

I never said line rental should be free - only that I should not be expected to pay for something (the very cheap off peak calls - previously these were inclusive miniutes) I do not want to use - I am quite happy to pay line rental.

Indeed the other services of gas and electricity used to have a substantial standing charge to maintain infrastructue, but it was decided to do away with this and add this cost to the cost per unit, which could easily be applied to the telephone network.

The point I have is that by including calls or subsidising the cost of calls by having an artificially high line rental price, it makes it less likely that customers will move from BT, as everyone must a least pay line rental, and therefore this practice is stifling competition.

However this is just my opinion.

  georgemac 12:01 12 Jun 2004

my only complaint is that the cost of line rental is artificially high because of the included benefits - I do not object to paying basic line rental (which used to be the case some years ago).

Hopefully the rest is clear - re reading the original post I can see why you may have thought I was arguing for free line rental.

  byfordr 12:18 12 Jun 2004

I agree, I remembering argueing with BT as they had automatically stuck me on a price plan. Got no where. Speaking to friends and family who work for BT I think line rental is one of the main areas BT makes money.

R

  dewskit 12:43 12 Jun 2004

Both Powergen (Took over from Yorkshire Electricity)and Scottish Power levy a standing charge per day on their bills for Electricity and Gas ostensibly to cover the costs of metering.

Scottish Power offer a no standing charge option, but the cost per Kwh is then higher

  Stuartli 14:55 12 Jun 2004

According to the BT.com website, the standard line rental charge, including Inclusive Call Allowance of £2.15, is £9.50 a month.

As far as I can remember, until quite recently the line rental charge has been £9.27 a month.

So the amount you appear to be concerned about is 23p a month.

  Stuartli 15:14 12 Jun 2004

That should in fact read .."as far back as I can remember..."

The reason the figure sticks in my mind is because I when I first started with WorldOnline (now Tiscali) in the later part of the 1990s, I paid a sum of £14.99 a month for Anytime Internet Access.

That figure also served to provide me with lower cost phone calls through WorldOnline and, believe it or not, the BT line rental charge of £9.27 a month....:-)

Not surprisingly, first WorldOnline (after a couple or years or so of such a bargain) and then Tiscali with its Tiscali 50 and 100 services, realised that offering such cheap internet and voice calls was not a viable proposition.

  georgemac 15:46 12 Jun 2004

line rental will be £11.50 per month, unless you pay by direct debit when it is reduced to £10.50, so it is a little more than 23p, and it is not the money but the principle that BT are charging thousands of customers of other telecoms providers (the inclusive calls etc) for a service they do not use and are getting away with it.

As far back as I can remeber, line rental used to be around £7.50 per month until BT started including call time in the line rental package.

Many BT customers (mainly pensioners who have the phone but do not use it much) would also benefit from a basic line rental charge with no inclusive benefits or minutes.

byfordr, it does not suprise me that BT make a lot of money from line rental, they have increased it over the years by including call time & now moving away from this by forcing everyone on to a tarriff they may not need. My only surprise is the regulator letting them get away with it, and the other telecos not raising this with a body like the competition commission.

  georgemac 15:52 12 Jun 2004

click here new pricing from BT. Stuartli I can assure you I would not be in the least concerned about 23p per month.

However BT will be different, I do not know how many million customers who are paying them line rental, a conservative estimate would be 30 million, probably a lot more. So £2 per month more multiplied by 30 million by 12 months is £720 million, albeit this will be reduced by the loss of call charges on the BT Together option 1.

However, they will have very smart accountants, and I am certain the change will not leave BT with a smaller bottom line!

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