Landline customers of BT could see their bills fall as the telecoms body brings in new rules.
More than two million people across the UK could have their monthly cut by £5 a month under plans announced by regulator Ofcom.
The overhaul the system is for landline-only customers which includes those who sign up because they do not want broadband or pay TV, or because they take these services under separate contracts, from different companies.
Thousands of elderly customers will also benefit from the change. At present, 43% of bill-payers with a standalone landline contract are aged 75 or over - 70% of these customers have not switched provider in over 20 years.
In a report, Ofcom said that elderly or vulnerable customers could be getting "poor value for money" while missing out on competition in a market that is not serving them well enough.
It added customers of ‘bundled’ services – packages including landline, broadband and/or pay TV – benefit from a range of attractive deals, driven by strong competition.
Almost 80% - 2.3 million - of the UK’s 2.9 million landline-only customers are with BT.
However, almost all providers have increased their line rental charges in recent years – by between 25% and 49% in real terms.
Just last month Sky announced plans to hike line rental fees for all phone and broadband customers - with the increase to take effect from 1 March.
This is despite providers benefiting from around a 26% fall in the underlying wholesale cost of providing a landline service
What's changing?Ofcom says it intends to give customers with standalone landline contracts "additional protection" by cutting the cost of BT’s line rental by at least £5 per month – or £60 per year.
This would mean that BT customers with only a landline, who currently pay £18.99 per month for line rental, would pay no more than £13.99 – a reduction of at least 26%.
Customers with packages or bundles featuring TV or broadband services will not qualify for the saving.
Discussing the potential overhaul, a BT spokesman told Mirror Money: "We take our responsibilities in this area very seriously and, unlike other companies, have many customers on special tariffs for socially excluded or vulnerable customers, including BT Basic, which still costs just £5.10 a month for line rental and calls, and Home Phone Saver.
"Recently, we have frozen the cost of line rental for all of our customers who take a BT phone line. We have also been improving the service we provide and customers have benefitted from our multi-million pound investments in a faster fault repair service, the launch of our free nuisance calls prevention service BT Call Protect and bringing call centre work back from India to the UK."
Ofcom has also vowed to implement safeguards to prevent BT from making future increases to line rental and landline call costs by more than inflation.
Ofcom Chief Executive, Sharon White, said: "Line rental has been going up, even as providers' costs come down.
"This hurts people who rely on their landline the most, and are less likely to shop around for a better deal. We think that’s unacceptable.
"So we plan to cut BT’s charge for customers who take only a landline, to ensure that vulnerable customers get the value they deserve."
Consumer telecoms expert, Dan Howdle, at Cable.co.uk , said landline prices have exceeded inflation by a factor of twelve in the past three years alone.
"While these costs are absorbed easily into the prices of bundled packages including broadband and TV, proportionately they have affected most landline-only customers, which correlated strongly with those that are least able to cope with the added costs.
<>p"Ofcom has stepped in and done exactly what was needed."Hannah Maundrell, Editor in Chief of Money.co.uk added: "At last, the great communications clean up begins and Ofcom is finally doing something about the stanglehold providers have over loyal landline customers.
"Consumers are stuck between a rock and a hard place as they need a landline to get a broadband service.
"Whilst the cost of landlines have consistently increased with what seems a life of their own, standards of service sadly haven't - so why the extra costs?
"This will protect the most vulnerable customers, such as the elderly, from paying through the nose."
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