BT Business Price Rises And What To Do - Birchills Blog
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What To Do About BT Price Rises

BT price rises written on cartoon bomb about to explode

We all know that BT have been raising their prices for years. The only justification is to increase their profits and pay down their pension deficit. To find out just how much they have increased, what their strategy is and what to do about it - read on.


WHAT'S HAPPENING

BT divide their business between Residential and Business. This year the Business part increased it’s prices in May and the residential part increases it’s prices in July. This is the 3rd increase in 18 months.
 
BT have been doing this for many years and it is staggering to note how the increases have added up.  In 2008 the line residential line rental was £11.50 and it then rose to £12.50 , £12.79,13.29 successively until from the 3rd of July 2016 it is £18.99 a month. If the rate had increased in line with RPI inflation it would be £14.40. So BT have managed to beat inflation by 31%!
 
Considering that this is a technology business where prices should drop – not increase at all - this is some achievement. It is also an achievement when one considers that the wholesale price of line rental charged by OpenReach hasn’t risen for years.

STRATEGIES

BT have multiple strategies:
1)     Reduce overheads faster than their customer base drops. For instance they have not sold directly to the small business sector directly for many years – relying instead on a series of franchisees who sell under the name BT Local business. They are coy about this list – so we have published it here.
2)     Hide the level of price hikes through complexity. BT publish price lists which are staggering in their complexity – so it is impossible to calculate what costs will be up front. We have tried to simplify but to no avail. They also alter the rules applying to each set of tarrifs with startling regularity.
You can see the current price list at http://btbusiness.custhelp.com/app/answers/detail/a_id/31413/c/2481,3652,2577/session/L2F2LzEvdGltZS8xNDY3Mjg1NzM1L3NpZC9hdk9XMWxVbQ%3D%3D
and residential at http://www.productsandservices.bt.com/products/lib/pdf/BT_PhoneTariff_Residential.pdf

3)     Tie customers in with multiple contract lengths and discounts associated with those lengths.
4)     Push up business prices faster than residential prices. A standard business phone line rental is now £22.30 a month plus VAT. However there are multiple deals, exceptions and exceptions to exceptions to consider. So it is impossible to know up front what you will pay for calls and you cannot leave until your contract is up.In terms of profitability it is clearly working well. In terms of customer service – not so good.
WHAT TO DO

You can either carry on absorbing the inflation busting increases for ever or change providers.All UK Phone lines are operated by OpenReach which although it is a BT subsidiary does operate independently.  So if you swap provider you will get exactly the same service. OpenReach are currently charging just under £10 for a landline to wholesale customers. There are many examples of telephone companies who are delighted to sell you those lines with a minimal mark up.
For full disclosure - Birchills Telecom does not resell landlines. We do however provide a VoIP phone service over the internet with real phones which cuts the cost of a full phone service in year one by 71%.
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