One interesting ‘in the small print’ pieces about BT’s fibre to the premises (FTTP) technology is that if you don’t also have a BT copper phone line then the rental for the FTTP technology will be higher, than if you did. Interestingly the increase is very similar to the wholesale cost of a BT phone line. So what BT is saying is that irrespective of whether you need a phone line or not, BT will make sure they make the same amount of rental income.
Now from BT’s perspective, they may argue that they are actually discounting the FTTP service for customers already paying out for a BT line – rather than increasing the cost for people who don’t choose to have one. However surely with the advancement in speeds that FTTP affords the need for a phone line diminishes? With the likes of Skype offering land line style services, mobile phone companies offering millions of free minutes, home signal boosters and so forth the concept of having a POTS (plain old telephone service) becomes less important. Surely the customers who have FTTP and a phone line will be less than those who just choose the fibre? Lets ignore for a moment as to why a 100 year old technology, which has been paid for many times over, actually costs more than it did this time last year.
The problem is nobody has told BT, and through the actions of their retail department recently upping the cost of line rental to £15.99 it has allowed it to market even cheaper broadband services, that surprisingly have to run over it – creating a very important cashcow for the group.
Unfortunately FTTP doesn’t need a phone line. TalkTalk has taken a leaf out of BT’s book and currently offer the cheapest unlimited broadband deal in the UK, apparently, at £3.99 per month. Sounds good. Until you realise that it needs a £15.99 line rental to operate, so actually it is £19.98. And with wholesale costs of phone lines at £10 per month it actually means the broadband component is £9.98. Ok still good value but surely this dubious marketing model shouldn’t make its way into the world of true fibre to the home?
Hopefully as competition hots up, and the new FTTP services being launched which don’t rely on a ‘line rental’ component, BT will be able to focus on the future, rather than income streams of the past.
An interesting piece and although many are not in the position where they can get rid of the phone line in the area where I live and B4RN is being deployed it is now an increasingly common next step for customer to ditch the phone line and rental in favour of a VOIP provider. Vonage is the current preference I think, mainly because they are well know, the word in the community is that they are reliable and also they are offering a good starter deal to new B4RN customers.
An interesting article. Although many are not yet fortunate enough to ditch the BT line and associated rental, in the area where I live where many are now being connected to the B4RN FTTH service it’s becoming common place for customers to ditch the BT line in favour of a VOIP service. The current preference is Vonage. Mostly because the word in the community is that it’s reliable and also they have been smart in offering new B4RN customers a good deal.
True – but as you say once you have FTTP then the need for a phone line evaporates. Good point on Vonage – I haven’t used it myself but may get one in to see how it works.