Relaxed Ofcom Rules see BT Drop Prices Again

Millions of customers are set to benefit as BT today slashed the prices of its Option 2 and 3 call packages by up to 20 per cent. BT say their price cuts mean they offer the best value for inclusive call packages, undercutting all its major competitors for stand alone call packages where prices are not linked to other services.

Existing Option 2 and 3 customers will automatically benefit by £34 million in the coming year. For customers taking an eighteen month contract larger savings are also available as BT is offering free weekend and evening UK calls for a year to anyone signing up to Option 2. This offer is open to BT’s 11.4 million Option 1 customers as well as to new customers. People signing up will save more than £40 each as BT is waiving the £3.45 monthly fee for Option 2.

This is the second major round of price cuts following Ofcom’s relaxation of price controls last summer. The price of BT’s Option 3 package has almost halved in just ten months enabling customers to enjoy unlimited UK landline calls for less than the cost of a first class stamp each day (£7.95 a month) not counting line rental. Customers wanting unlimited evening and weekend UK calls with Option 2 will pay 11.5p per day (£3.45 a month).

BT is also offering customers other ways to save money. BT International Freedom is a new package offering unlimited calls to 36 countries for just £5 per month. BT is also offering savings of at least 25 per cent on calls to mobiles with its CallMobile package. This package, already free on Option 3, is now being made available for free to Option 1 and 2 customers who take out a new 12 month contract.

The major price changes from June 1 include:

– Option 3 is cut from £9.95 to £7.95, taking the overall saving over the last ten months to more than 45 per cent

– Option 2 is cut from £3.95 to £3.45, taking the overall saving over the last ten months to 37 per cent

– Line rental is cut by a further 25p a month to £10.50 for customers who choose an environmentally friendly paper-free bill.

BT will introduce further price changes from August 1. The cost of calls to UK landlines at evenings and weekends is set to fall by 18 per cent, from 5.5p an hour to 4.5p. This is when people spend the most time making such calls. The cost of daytime calls will change from 3p per minute to 3.25p and there will be a revision to the set up fee for certain calls with this one-off charge moving from 3p per call to 6p. This fee does not apply to weekend or evening calls to UK landlines.

BT is also changing the way it charges for fixed to mobile calls and calls to 0845 and 0870 numbers. These calls will move from Daytime-Evening-Weekend rates to Daytime (6am – 6pm) and Evening (6pm – 6am) rates. Calls to mobiles will change from 13p / 8p / 5p per minute to 12.5p / 7.5p (or 9p / 5p for customers using the CallMobile package). 0845 calls will change from 3p / 1p / 0.5p to 2p / 0.5p per minute whilst 0870 calls will change from 7p / 3.5p / 1.5p to 6p / 1.5p per minute.

BT is also set to introduce a new social telephony service this summer. This will benefit the people who need it the most, providing low income customers with a telephone line and an inclusive calls allowance for less than £5 per month. Full details will be revealed closer to launch.

Recent research has shown that 83 per cent of customers prefer to know what their bill is going to be in advance. BT is therefore promoting its call packages from June 1 and writing to all its customers about the price changes. The trend towards such packages was evident last year when more than a million customers moved onto them.

Gavin Patterson, BT managing director Consumer said “BT is listening to its customers. They’ve told us they want better value packages, and what could be better than getting all your calls to landlines for the price of a first class stamp each day. They also said they prefer the comfort of a calls package and so we’re giving them what they want. Why pay per call when you don’t pay per e-mail?”

Patterson added “BT has reduced prices by more than £1 billion in the last decade and today’s cuts show that we offer the best value for call packages. We’ve also made it easy for customers to save money on their calls to mobiles and abroad. For anyone who was tempted away, there’s never been a better time to come back to BT.”