Telecoms group announces massive price rise, despite �1.7bn profits in May this year
BT has announced it is upping its landline charges and call costs for the third time in 14 months.
After reporting in May a 71% increase in profits to �1.7bn, the company now says its landline charges will rise by 5% to �14.60 a month on 3 December. Call charges also rise by 5%.
BT last increased prices four months ago.
The company's decision is the latest blow to households already reeling from 18% gas price hikes announced earlier in the summer. It is likely to lead to more people getting rid of their landline phones altogether.
BT says its Anytime calls package will rise by 20p a month to �4.90. It is also scrapping the paperless bill discount for new customers, although those who have already signed up will keep their discount. The cost of connecting a call is now 13.1p.
The only positive note is the company's promise to freeze its headline prices until the start of 2013. It is also exempting from the increases its Line Rental Saver deal, which lets customers pre-buy their annual landline fees for �120.
John Petter, managing director of BT's consumer division, defended the hikes: "We are making a series of price updates in December, but are then freezing some of our main prices until 2013. This will provide our customers with greater certainty over their bills. We are also telling them how they can save money with BT. Our Line Rental Saver product, for example, will soon provide customers with a saving of more than �50 per year."
The move will inevitably lead to criticism that the company is profiteering at the expense of consumers. The previous increase to landline and call charges was imposed in April after some big price hikes in October 2010.
The increases have particularly affected those on its basic package who make few calls, including some elderly people. The cost of making a landline call with BT has risen by 40.7% since 1 April 2010, and December's increase will add a further 5%.
Michael Phillips of Homephonechoices.co.uk describes the increase as disappointing, and warns it will prove very unpopular with households who are already feeling the pinch. He advises BT customers to consider pre-buying their landline and switching to its Anytime calls package, which is now a BT bestseller.
Source: http://www.guardian.co.uk/money/2011/aug/27/bt-raises-prices
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