3 Price Hikes in 2 Years for BT Customers

BT’s residential customers are facing their third price rise in the space of two years this December.

Call charges will rise by 5% on the 3^rd December 2011, following a 10% rise one year ago and another 9% rise in April this year.  Customers will find UK landline calls will go up from 7.6p a minute to 7.95p a minute. Line rental prices are also set to rise.  Calls to mobiles will stay the same although there is no guarantee that this will remain the same next year. 

"A report from Ofcom shows the UK has lower prices than the USA, Spain, Germany, France and Italy. The UK market is highly competitive," a BT spokesman said.

However, following the energy price hikes last month, Michael Phillips, product director at price comparison website Homephonechoices.co.uk has responded on behalf of consumers everywhere: "While BT's price increases of 5% or less may be in line with inflation, it will prove very unpopular with households who are already feeling the pinch.”

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TalkTalk have been breaking records, but for all the wrong reasons

Ofcom have issued the largest fine that they have ever enforced on a telecoms provider as TalkTalk and its Tiscali UK subsidiary have been fined £3m for incorrectly billing more than 65,000 customers for services they had not received.

The punishment follows an investigation into the two businesses that started in July 2010 as a result of more than 1,000 complaints.  TalkTalk blamed the billing errors on the amalgamation of the Tiscali UK business following their purchase of Tiscali UK in 2009.

In its ruling, Ofcom said, the telcoms company had wrongly issued bills to 62,000 customers, in particular those who had closed accounts, between 1 January and 1 November 2010. In April this year, Ofcom said that TalkTalk was the most complained about telecoms firm for landline and broadband services.

TalkTalk has since paid more than £2.5m in refunds and goodwill payments to affected customers.

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Reduced Prices for Home Telecoms

Consumers may be on the brink of reduced home telephone and broadband services as Ofcom make moves to level the wholesale playing field. 

The telecoms regulator has revised the list of rates that Openreach, which manages BT's network, can charge other providers for using its services.  The proposals are the start of a consultation process that will end on 9 June.

With wholesale prices potentially falling by more than 10% per year, companies such as TalkTalk and Sky will see real benefits that could be passed on to consumers.  However, those that provide their own cable network, such as Virgin Media, will not experience those benefits.

Under Ofcom's proposals the prices of two of the ways that BT's rivals get access to its network will come down.  The first, called Local Loop Unbundling, allows telecoms firms to site their equipment in BT exchanges and take over lines to customers.  The second, is called Wholesale Line Rental, which involves telecoms firms simply renting lines from Openreach.

In response, BT released a statement which said: "BT invests more than any other company in the UK's communications infrastructure, so it is critical that it is able to achieve a fair rate of return in order to continue its investment in copper and fibre-based services."

Any concerns BT have will be raised during the continued consultation process, the conclusions of which will be published in the autumn.  Any price changes will take affect later this year.

BT Price Hike

From the beginning of October BT customers are going to be charged up to 10% more for phone calls on their landlines.

The Telecoms giants are also hiking up the costs of land line rental by 50p. Price reviews are necessary so that the company can come out of the recession in “good shape” said a company spokesman.


12.5million customers will see the cost of connecting a call go up from 9.9p to 10.9p and daytime rate will rise from 5.9p to 6.4p. This inevitably means that customers will be asked to sign long term contracts in order to save money.

BT workers facing strike ballot

The telecoms giant could suffer major disruption as the trade union is set to “press ahead” with its ballot for industrial action. BT has been locked in a pay dispute with the Communication Workers Union (CWU), which represent between 50,000 and 60,000 BT employees including engineers, retail staff, and call-centre workers.
The union, which is pushing for a 5% pay rise, following BT's annual results last month showed a 162% increase in cashflow, and profits of just over £1bn. Leading union leaders argue that their 5% claim would account for only a small fraction of BT's wealth.


BT however, is offering a 2% pay rise this year, followed by a further 3% rise next year. It is also offering a £250 bonus and a further £250 in performance-related pay. The previous offer was a one year deal of a 2% rise.
BT has also pledged not to make any voluntary redundancies until 2011 if staff accept the new terms. It also plans to bring call centre jobs and office work back from India.
Union leaders have accused BT of "blatant double standards" in its plans to award bumper bonuses to senior management after a rise in profits. Union leaders were further enraged when BT's annual report revealed that the company's chief executive, Ian Livingston, saw his bonus more than triple last year, taking his total pay package, including shares, above £3m.
It also emerged that Livingston's salary was to be increased by £50,000 to £900,000 this year, although he pledged to limit the rise to 2%, equivalent to what is being offered to BT's staff, and donate the rest to charity.
"We've made our position very clear: 2% is not good enough when the company is making profits of over £1bn, paying shareholders a 6% dividend and paying out large sums to senior executives while inflation is at 5.3%," Kerr said.
Ballot papers will be sent out on the 18th June and the ballot will close on 5 July with the result expected the same day.