This week, SKY announced that it will increase phone
line rental charges by more than seven times the rate of inflation from
December. The line rental charge will jump from £12.25 to £14.50 a month –
that’s 18%. Sky is also increasing the cost of daytime calls, from 7.95p
to 8.41p a minute and its call connection fee will go up from 13.1p to 13.87p.
Similarly, BT has announced a rise in line rental
charges £14.60 a month to £15.45 from January 2013. And, BT’s call
charges will also go up. Full-price daytime calls will rise from 7.95p a minute
to 8.41p and the call connection fee will rise from 13.1p to 13.87p.
Virgin and TalkTalk have already implemented
way-above-inflation increases in line rental charges, but BT and Sky
are the dominant domestic telecoms suppliers.
There are a number of things that strike me about these
announcements.
First, what is the justification for these inflation-busting
increasing line charge rentals? I can’t think of one. One telecoms supplier – Primus
– charges £8.25 a month. It uses the same infrastructure as the other
suppliers. Is it subsidising its line rental costs? I don’t think so. So, why
are the dominant suppliers charging nearly 90% more for that part of the bill
which is inescapable?
Secondly, increasing the line rental charges means that
those who make the fewest calls – typically pensioners on the lowest incomes – are
facing the highest percentage increases in their bills.
Thirdly, in what the suppliers call a ‘highly competitive
market’, how do BT and Sky manage to arrive at exactly the same
costs for daytime calls and connection fees? Is it coincidence? I don’t think
so.
That’s why I’ve called on the Competition Commission and the
Secretary of State for Trade and Industry to launch an investigation into the
telecoms’ suppliers and, particularly, these latest announcements.
