Having shone near the top of the on Tuesday with a 3% boost from OFCOM’s formal requirement that incumbent rival BT hive off the Openreach network infrastructure division that other operators have little choice but to piggy back, the tables have turned for TALK shareholders. Today they find themselves holding the index wooden spoon, their shares down 6% and trading 4.5yr lows. This comes on news that the same UK telco regulator is launching a formal review of UK landline pricing with charges having risen as much as 40% in recent years despite the underlying costs of provision falling by as much as 25%.

It is widely accepted that the highly competitive UK telco market uses inflated landline charges to subsidise cheap calls, broadband and now even TV, services which are in certain cases offered almost gratos in order to encourage customers to switch. Growing new subscriber stats represents the holy grail for most providers. However this model is seen as penalising those who use a landline for calls and nothing else, such as the elderly and vulnerable, members of society who have a right to fair pricing but less able to seek out and benefit from the best package for their more basic requirements.

Mike van Dulken, Head of Research, 1 Dec