Commenting on Ofcom’s proposed changes to BT’s landline-only service, Richard Neudegg, Head of Regulation at uSwitch.com, says: “As we have seen with the CMA’s intervention on prepayment meters and the FCA’s cap on the interest rate of payday loans, it isn’t unusual for a regulator to step in where there are major constraints on competition impacting particularly vulnerable customers.
“The proposal for a three-year control announced today by Ofcom sets out to lower the cost of BT landline-only services by at least £5 a month. The relatively small group of consumers that access these services – largely made up of the elderly and vulnerable without access to the internet – are the most reliant on voice-only services and least likely to leave BT for a better deal.
“These unique circumstances have resulted in an essential lack of competition in the landline-only part of the market. Consequently, we’ve seen many fixed voice-only packages not really offering best value for money – with bundled or mobile services often representing cheaper ways to make calls.
“Team this with the fact the demographic tend not to be online, and are the least likely to engage with the market and switch their services, and it is right Ofcom is looking closely at what can be done.
“As with any proposed regulatory intervention, we encourage Ofcom to closely monitor the impact on the wider market to ensure the proposal is fit for purpose, avoiding any inadvertent knock-on effects where competition, driven by choice, is buoyant.”
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