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Author Topic: Land Line Prices - Ofcom strikes  (Read 560 times)

Oldjim

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Land Line Prices - Ofcom strikes
« on: February 28, 2017, 09:20:14 AM »

http://www.bbc.co.uk/news/business-39112871
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The planned price cut will effectively reverse cost rises seen in recent years, Ofcom said. BT customers, who pay £18.99 per month for a landline-only contract, would pay no more than £13.99.
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BT is not alone in raising its prices. Major industry players have increased line rental prices by between 25% and 49% in real terms in recent years, while wholesale prices have fallen by about 26%, Ofcom said.
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NewtronStar

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Re: Land Line Prices - Ofcom strikes
« Reply #1 on: February 28, 2017, 08:38:27 PM »

Well I wish they would look into elderly BT broadband usage as we give them amazon devices to watch movies which eats away there usage allowance if they are not unlimited and then hit with a BT bill of £158 for going over allowance 83 year old widow a family friend  >:(
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admin

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Re: Land Line Prices - Ofcom strikes
« Reply #2 on: March 01, 2017, 02:44:35 AM »

Just goes to show what most of us on here have been saying for years, in that landline charges are being used to subsidise cheap broadband. 
There's more profit in landline & call packages than what there is on broadband.   Line rental is also a lot less work and requires less equipment, and staffing and customer service than broadband.
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c6em

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Re: Land Line Prices - Ofcom strikes
« Reply #3 on: March 01, 2017, 08:24:44 AM »

You are correct - but be careful what you wish for.
There are more landlines than broadband activated landlines in the UK.

So if this cross subsidy of broadband by voice-only-landline-rental is removed then the line-rental-broadband should need to go up.
As you also say the broadband related line maintenance and repair is much more expensive than the voice related line rental and repair costs so again if the costs were correctly allocated to mythical components of BB line rental and Voice line rental then the BB-line-rental component should rise very significantly.

All of which is possibly not so good news for all those ranting about wanting a broadband service only and no voice service on their line and now much cheaper it would be!
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kitz

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Re: Land Line Prices - Ofcom strikes
« Reply #4 on: March 02, 2017, 11:39:44 AM »

The cross subsidisation got completely out of hand.  Openreach has actually reduced the cost of WLR over the past 10yrs yet the ISPs have doubled the prices that we have to pay. {Ive included actual breakdown figures many times in the past}

IMHO it was so the ISPs could advertise head line grabbing cheap or free broadband.  Most of the big ISPs were guilty hoping that consumers wouldnt notice the cost of line rental.

With the new ASA ruling last October, ISP's have to show the total package cost including LR.  Now they cannot advertise such things headline grabbing 'Free Broadband' is no longer as easy to hoodwink the consumer as to how much they pay for LR.

WLR is currently £86.72 per annum (£7.23 pm).  The ISPs have very little own costs to add on top of this. 

Yet Wholesale cost for WBC adsl is £5.88.  On top of this the ISPs have to pay for bandwidth as the MSILs and backhaul transit OR Host Links and bandwidth costs.  Both of these costs are substantial and amount to 100's of £thousands to £millions.  Then they also have to buy some hefty terminating equipment such the Junipers.   Just a couple of those is nearing £1.5m.  Then add on numerous servers and internet transit and finally provision of e-mail and any other addons such as free modem. Broadband requires far more in-house technical staff and a lot more CS staff.   Faults and problems are far more likely to occur.

By the time you add on VAT, it doesn't take a genius to work out that adsl for much under a tenner is running at a loss and therefore being cross subsidised.
Its a fact that a lot of people are overpaying for LR and under paying for broadband.  There's a few smaller ISP's who do currently align pricing to true cost, such as AAISP or Pulse8 etc, but over the past 10 years practically all of the large ISPs have cross subsidised to some extent or other.

>> All of which is possibly not so good news for all those ranting about wanting a broadband service only and no voice service on their line and now much cheaper it would be!

What will happen is that the General Public will expect their bills to reduce by whatever they are paying for Line Rental.  If they are currently paying £18-£20pm for LR, then they anticipate that they will no longer have to pay the £18.  Yes really!! That is what a large portion of the population are assuming will occur.   The more astute know that this cannot and will not happen.


IMHO this is perhaps a move to more correctly re-align the pricing for when the no voice service does become available.
Because of the new ASA regulations for bundling the fee's together as a package, few will notice that although their LR may have come down, the broadband element has increased. If you purchase broadband now, very few sites show breakdown costs eg BT
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sevenlayermuddle

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Re: Land Line Prices - Ofcom strikes
« Reply #5 on: March 02, 2017, 06:47:54 PM »

Just goes to show how remote Ofcom are, from the role they think they are performing.

I have landline only from BT, broadband from a.n.other.    I am aware I might get a better deal from a bundle but I am entitled, for whatever reason, to make that choice.   It is frankly rather offensive to be branded "elderly and vulnerable" just because I decline to play the switching/bundling game.   >:(
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Chrysalis

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Re: Land Line Prices - Ofcom strikes
« Reply #6 on: March 02, 2017, 07:59:41 PM »

my issue with what ofcom has done is that they have only capped BT retail, all the retailers should have got it handed to them.

Again they been naive in thinking that competition will make the others follow suit.

--edit--

sevenlayermuddle I agree, they are so obsessed with the wholesale side of things, they seem to have not a clue on whats wrong on the retail side.

However this isnt surprising when reading ofcom's remit, the remit is simply to ensure competition, part of their remit is even to protect the financial state of the companies they regulate, in other words they cannot do any heavy handed stuff like the americans do with their super large fines and what not.
« Last Edit: March 11, 2017, 08:57:34 AM by Chrysalis »
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