TMCnet News

Sky's the limit as charges jump four times more than inflation: Telecoms firm follows BT in hiking landline and call costs by more than 6% - with Virgin expected to join the bandwagon.Miles Brignall reports
[October 25, 2014]

Sky's the limit as charges jump four times more than inflation: Telecoms firm follows BT in hiking landline and call costs by more than 6% - with Virgin expected to join the bandwagon.Miles Brignall reports


(Observer (UK) Via Acquire Media NewsEdge) Sky has become the second largest telecoms firm to increase its landline and call charges by more than 6% and is to start charging pounds 12 a year for its previously free 1571 answerphone service.

The company, which offers telephone services to more than a third of its 10.7 million pay-TV customers, said the increases, at more than four times the rate of inflation, will take effect from 1 December.

Against a backdrop of falling inflation, home phone customers have been some of the biggest price increases in recent months. Back in August, BT said it would also be increasing its charges by more than 6% - again on 1 December. Virgin Media is expected to announce a price rise next month.



Sky said this week that its broadband and call-plan subscription charges would not be increased and have remained frozen for more than four years. However, the cost of the Sky landline - required by all telecoms/broadband customers - will rise by pounds 12 a year to pounds 16.40 per month.

Customers also face a big increase if they make chargeable calls (those not included as part of a price plan). The connection fee for almost all non-inclusive calls will rise from 15p to 15.9p per call; calls to other UK landlines will increase from 8.9p per minute to 9.5p per minute. Calls to UK mobiles, charged at 12p per minute at all times, will climb to 12.7p per minute.


From December, Sky customers will also pay pounds 1 a month to access their answerphone service. This is less than BT's pounds 1.85; however many customers are likely to resent having to pay for a service that was previously free.

Many BT customers were unaware they were being charged when BT introduced the same measure last year. Rival TalkTalk still offers the answerphone service for free.

A Sky spokesperson said: "We always aim to offer great value and our line rental is lower than BT's. Sky's even better value when customers also take our great value broadband. Sky Broadband Unlimited customers have paid the same low price for the past four years." The company, which announced profits were up 11% in the three months ending in September, said it was following a similar move by BT. In August BT, which has 7.3 million home phone and broadband customers, said that from 1 December the cost of a BT landline would go up by pounds 1 to pounds 16.99/month and the cost of its broadband service by up to 6.49%.

The price rises are out of kilter with inflation, which slumped to its lowest rate for five years, at 1.2% for September.

Virgin Media, which usually announces its annual price hike in November, is also expected to push through a 6% hike as it did last year. The phone companies have traditionally followed BT's lead each year and this year looks no different.

"While broadband deals are getting cheaper than ever, landline prices are continuing to climb year on year - and consumers are feeling the impact," said Ewan Taylor-Gibson, broadband expert at uSwitch.com. "The cost of landline rental, although seemingly small, has increased by a whopping 42% over the past six years alone, way beyond the rate of inflation." Dominic Baliszewski, telecoms expert at broadbandchoices.co.uk, says recent research by his firm found that more than a third of landline customers felt that line rental was poor value for money and a similar number would "get rid of their landline altogether if they didn't need it for their broadband connection".

"The fact is that line rental price rises over the past five years have massively outstripped inflation and customers are rightly questioning why this is the case," he said.

Some have been left wondering whether phone customers are paying for expensive TV rights, particularly in BT's case. In 2012 it paid pounds 738m to show 38 live Premier League football matches over three years. It has since added a host of other TV sports rights, including a pounds 1bn deal to broadcast the Champions League, and is taking on Sky in the paid-for sports and broadband markets.

Captions: Phone customers, especially those with BT, suspect they are subsidising Premier League TV rights. Getty (c) 2014 Guardian Newspapers Limited.

[ Back To TMCnet.com's Homepage ]