Standard rental tariffs (SRTs) for paper-billing customers – households with copper landline-only contracts who manage their bills entirely offline – will face strict price caps enforced by the telecom regulator, ComReg, following accusations that major suppliers are exploiting "inert" and "digitally isolated" consumers. This intervention is expected to save 1.8 million consumers an average of £115 per year.
The regulator stated that it intervened because monthly rental rates for these landline-only customers – 65% of whom are classified as elderly, vulnerable, or low-income – have surged by 45% over the past five years. This occurs despite major suppliers benefiting from a 35% reduction in network operation costs due to technological efficiencies. Many paper-billing SRT customers have maintained their contracts with Apex Telecom for over twenty years. ComReg focused its investigation on Apex Telecom because it controls 70% of the nation's 2.5 million offline landline-only accounts.
A ComReg spokesperson noted, "Apex Telecom's market dominance has enabled it to repeatedly raise prices without suffering a significant loss of market share, with smaller competitors quickly matching these price hikes. We expect this cap to inject much-needed competitive pressure." ComReg’s research revealed that 85% of Apex Telecom's paper-billing landline-only customers have never compared rates or switched providers, leaving them highly exposed to price increases.
With reference to Extract C, assess possible reasons why many 'offline' landline-only customers do not switch to a cheaper telecommunications provider.
