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Vodafone is to remove line rental charges for new and upgrading fibre-based broadband customers in what the operator claims is an industry first that will make it one of the cheapest internet service providers (ISPs) around.
Vodafone said users would still receive a landline service but would no longer have to pay anything for it. It claimed that customers purchasing its Unlimited Fibre Broadband 76 package could potentially save up to £332 over the 18 month contract lifetime, versus a comparable BT product, and £349 versus Sky.
The operator said it had found that landlines were increasingly seen as underused, expensive and even unwanted by consumers as they turn to mobile communications and messaging apps at the expense of their landlines.
Nevertheless, ISPs continue to require users to pay for a landline, even if they never use it, to receive a broadband service because they use the same infrastructure.
Recent Ofcom research said 45% of consumers said internet access was the most important reason for having a landline.
“Giving our customers the opportunity to break free from hidden line rental charges lets our customers know that we are listening. We are serious about providing them with the unlimited home broadband experience that they deserve,” said Vodafone UK commercial director Glafkos Persianis.
“We started our journey into fibre-optic home broadband just over a year ago, and are delighted to show that we are a truly innovative and customer focused provider.
“Our customers depend on us to stay connected, and now we can satisfy their needs both at home and on the go while also putting an end to line rental charges.”
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The operator added that in launching its new broadband pricing structure, it was responding to Ofcom and the Advertising Standards Agency (ASA) pressure to make broadband pricing easier to understand.
Joint research, published by the comms regulator and the advertising watchdog earlier in 2016, purported to show that only a quarter of UK consumers were able to correctly identify the total cost per month of a broadband package after viewing a TV advert.
As a result, the ASA has brought in regulations stating that ISPs must now advertise all-inclusive costs, and stop separating out line rental charges if applied. TalkTalk has already scrapped separate line rental charges, although unlike Vodafone it has not done away with them altogether.
CCS Insight director of multiplay, Paolo Pescatore, voiced his support for Vodafone’s move. “It represents a great opportunity for Vodafone to steal a march on its rivals, more so given it is a relatively new entrant and faces significant headwinds in the fixed line broadband market,” he said.
“While others have tinkered with line rental pricing, we believe this is the first time a provider has decided to ditch it altogether. This move will go some way to provide customers with clear and transparent pricing and lays down the gauntlet for others who will be forced to go down this route,” he said.