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    Ofcom Shows the Gap Between Wholesale and Retail Line Rental Prices

    This is a discussion on Ofcom Shows the Gap Between Wholesale and Retail Line Rental Prices within the General Computing and Internet forums, part of the Community channel category; Ofcom Shows the Gap Between Wholesale and Retail Line Rental Prices - ISPreview UK Ofcom has today published their tenth ...

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      Ofcom Shows the Gap Between Wholesale and Retail Line Rental Prices

      Ofcom Shows the Gap Between Wholesale and Retail Line Rental Prices - ISPreview UK
      Ofcom has today published their tenth annual Consumer Experience Report, which among other things helps to reveal the growing gap between what UK ISPs pay for their line rental (phone) and how much they charge their subscribers.

      Interestingly Ofcom’s latest data doesn’t appear to make the link between larger ISPs shifting their broadband costs onto line rental, often in order to make the Internet side of their service look more attractive to potential consumers (the line rental cost is often shown in smaller advertising print, although the ASA are trying to tackle that).

      Instead the regulator largely puts the high price of retail line rental down to falling voice call volumes (down 37% between 2009 and 2014) and a shift from usage-based to access-based pricing (i.e. as consumers purchase call bundles which include unlimited calls, rather than paying on a per-call basis).

      However this only tells part of the story because a lot of big ISPs use to bundle free evening and or weekend calls with their line rental, but today most entry-level packages have dropped that and returned to per-call pricing and yet there were no retail price drops to compensate.

      Similarly we should not underestimate the competitive impact of cheap mobile contracts, which is another thing that Ofcom doesn’t mention. We looked into some of these issues in more depth via our recent article – Examining the Changing Cost of UK Phone Line Rental and its Future.



      Apparently around 10% of UK households have a fixed voice service but no fixed broadband (most of them are with BT) and as such Ofcom says they don’t benefit from competition in the broadband market, although this overlooks the fact that a lot of standalone phone providers sell line rental for less than the big ISPs. However we do agree with Ofcom that voice-only customers have fewer options for switching due to the enforced bundling by big ISPs.

      The report further notes that the average monthly price of a residential fixed broadband connection (using data from H1 2015) has moved from £16.36 in 2013 to £17.83 last year, although this doesn’t necessarily reflect which packages consumers are actually choosing to use (cheaper “unlimited” deals tend to be more popular).

      Otherwise Ofcom’s report doesn’t contain a lot of new data, although it does confirm that overall consumer satisfaction with broadband providers remains fairly steady at 83% in 2015 (down from 85% in 2014), while mobile was flat on 89% and fixed line (phone) fell to 88% from 91% in 2014.

      Finally we also learn that around 10% of mobile consumers have switched operator in the past 12 months, which is roughly the same level as fixed line providers and fixed line broadband. In all three cases this represents a slight 2-3% rise in switching activity from 2014’s low period, although it’s about level with 2013.


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      Re: Ofcom Shows the Gap Between Wholesale and Retail Line Rental Prices

      Only 10% switched on mobile and landline. So much for all the competition! That's pretty low. Expect quite a bit of that too, is people moving house, jobs or in/out of college/uni rather than a better deal.
      I have one of those BT landline only neighbours and laughably they pay more for their landline phone package a month than most of us do for phone/broadband and sky tv. They often ask us if they can look at a website or fill out things like the election registration.
      Actually worked out last year that if they took basic sky broadband, tv and phone they would cut their bill by half. They have not.

      Hilarious that BT is top of the plus wholesale pile there LOL!

     

     

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