From today's (20th June) Sunday Telegraph.......




Ofcom ruling helps telephone landline users get a better deal
Ofcom, the regulator, has said that phone providers have agreed to lower their charges when people opt out of landline.


By Rosie Murray-West
Published: 9:28AM BST 19 Jun 2010

Even if you're one of those people who change their electricity and gas provider as often as they change their socks, the chances are that you are still paying through the nose for your telephone landline.

Many people are still tied into long contracts and are worried by the high charges they might face if they leave.



But last week Ofcom, the regulator, announced that phone providers had agreed to lower their charges when people opt out of landline or landline plus broadband contracts before the contract is up. The regulator said other providers would be expected to reduce their charges to similar levels, and that they could face formal enforcement action if they didn't.

Ofcom said the main providers – BT, TalkTalk and Virgin Media – "did not believe that their early termination charges were unfair". But after "constructive discussions" they have agreed to reduce their charges.

"This is great news for landline and broadband customers," said Mike Wilson of switching site Moneysupermarket.com. "People can be taken in by a cheap deal or freebies and easily find themselves tied into long contracts. Eighteen-month deals are becoming commonplace and, with the landline and broadband markets moving so quickly, people can often find they are no longer on the best deal shortly after signing up to a new one."

The announcement means that it is far more affordable for those tied to a contract to look for a cheaper deal. While you will still end up paying a small monthly charge for the remainder of the contract, your savings may well now outweigh that cost.

For example, BT used to charge £11.54 a month for customers who wanted to leave its Weekend package before the end of the contract. Now, after Ofcom stepped in, you'll pay £2 a month. For those on its Evening & Weekend and Unlimited Anytime packages the charges are £2.50 and £5 respectively.

For TalkTalk customers, the difference is even more striking. Previously those on its Evening & Weekend plan were paying a £14.44 a month termination charge (capped at a total of £70). Now the company will charge £3 a month. For Anytime plans it will now charge £3 instead of £16.98. Exit charges for its TalkTalk Essential plan have fallen from up to £33.48 a month to £8 a month.

Virgin Media customers also benefit from the agreement, with early termination charges falling from a maximum of £30 for a broadband and phone package to a maximum of £9.

Michael Philips of switching site Homephonechoices.co.uk said the announcement was a "significant victory". He said: "Customers wishing to end their contract early could be financially better off even taking into account their new provider subscription costs on top of their old provider cancellation fees."

If you feel you are paying too much for your landline, or fancy a combined landline and broadband package, the first thing to do is check which plan you are on. Ring your provider (you'll find the number on your telephone bill if you are not sure) and find out how long you have left on your contract. Landline providers offer a bewildering variety of plans, so check what yours includes.

You'll also need to find out what the exit charge is. Note that TalkTalk is introducing the new charges this month, while Virgin Media will not do so until August, and BT not until October. Tiscali, owned by TalkTalk, will introduce the lower charges on November 1.

Switching websites can help you to negotiate the maze of landline and landline plus broadband deals. Total savings for you will depend on your phone use. For users who don't want to include broadband in their package, one of the cheapest options is with Primus, which offers monthly line rental for £8.99 with evening and weekend calls free and daytime national calls at 3p a minute through comparison site uSwitch.

This compares with BT's charge of £11.54 a month for its Evening & Weekends plan, where daytime calls cost 5.31p a minute. Availability of all packages will depend on where you live, and switching sites will encourage you to enter a postcode. Some of the cheapest providers have not yet reduced their exit penalties, so check whether they are about to do so (Ofcom's comments suggest that they will) and how long your contract will be.

Those who wish to include their broadband internet with their landline deals will find the choice more confusing. For example, Virgin is currently offering a broadband, home phone and line rental package with unlimited calls for £11.99 line rental and what looks like £2.50 a month for other package costs. However, this will rise to £12.50 a month on top of the line rental after two months, and also requires you to pay a £35 connection fee.

Continued...........

sherbert wrote on Jun 20^th, 2010 at 9:32am:
Sounds to me like the networks have been told to lower their costs for those terminating their contracts earlier than their minimum term and after some moaning the main networks reluctantly agreed but around the same time, I'm sure an amazing coincidence as well, the networks introduce 'exit' charges.

It would be interesting to see how high these new 'exit' charges are?

Now I wish to be fair when I say this but if signing upto to a minimum term then you should stick to it imho.  The difference is when the terms are unreasonable like TalkTalk's 18 months and BT's 12 month contract even if just switching back to BT for calls after having been with another CPS provider, or any automatic renewal contracts after initial minimum term.