BT landline-only customers will save more than a third each year on their line rental bill, Ofcom has announced.

Up to one million customers will see their monthly bills cut by £7 after the telecoms giant agreed “in full” to a proposal made by the UK’s communications regulator.

This adds up to an annual saving of £84 – a 37% reduction from a typical yearly bill.

Ofcom said it had conducted a review of the market due to concerns over line rental prices rising despite a fall in wholesale costs.

It recommended that BT reduce its monthly bills by between £5 and £7, which the company agreed to “in full”.

The move will benefit thousands of elderly callers without broadband, Ofcom said.

Nearly two thirds of BT customers who only have a landline are over the age of 65.

A customer who currently pays £18.99 a month will pay £11.99 when the changes come into force in April 2018. This will return line rental prices to a similar level to those charged in 2010, Ofcom said.

The majority of affected customers – around 800,000 – will see the reduction appear automatically on their bills.

A further 200,000 people on BT’s Home Phone Saver package, which offers a separate bundle discount, will be able to choose whether they move to the standard tariff.

A BT spokeswoman said: “We welcome a balanced voluntary agreement with Ofcom which means that up to 1 million of our customers who don’t have broadband will receive a substantial cut in the price of their line rental from April 2018.

“We have listened to the concerns of our line-only customers and agreed to reduce the price of line rental for them by £7 a month, or £84 a year, which means they will only pay £11.99 a month for standard line rental.”

Jonathan Oxley, Ofcom’s competition group director, said: “For many people, their landline is their lifeline. But households who only have a landline – and no broadband – have seen their phone bills soar.

“Many are elderly, and have been with BT for decades. We’ve been clear that they must get a better deal. So I’m pleased BT has responded to our plans in full by cutting these customers’ bills.”

BTConsumer groups hailed news of price cuts for landline customers (PA)

Which? managing director of home products and services Alex Neill said: “Today’s announcement will be welcome news to those BT landline-only customers who will now see a cut to their phone bills.

“Ofcom should continue to do more to boost transparency and fairness in the telecoms markets, ensuring that all customers can access the right deal for them.”

Richard Neudegg, regulation spokesman at uSwitch.com, said: “BT’s voluntary agreement to cut bills for these customers at the upper end of Ofcom’s proposal is especially laudable in light of the fact landline-only services are usually taken by more vulnerable – particularly elderly – customers.

“This group of customers who don’t have broadband have lost out in recent years as the shift in competition in fixed telecoms has overlooked voice-only services in favour of broadband.

“For many of these customers the landline is seen as a lifeline, so this is a welcome move.”