The cost of fixed telephone line rental will be cut if proposals from Ofcom, the telecoms regulator, are adopted.
Phone companies pay BT for fixed line rental
The regulator wants BT to reduce wholesale line rental (WLR) for residential customers from £8.74 to £8.39 a month.
In addition, BT should cut the WLR for business customers from £9.95 a month to £9.17, representing an 8% reduction.
WLR is the price that telephone companies pay to rent lines from BT which they then hire to customers.
Ultimately, the reductions in WLR should feed through to customer bills.
In August, BT, unilaterally, cut the residential WLR charge from £9.24 to £8.74 a month.
Ofcom has now asked telecoms firms to submit responses to the proposed cuts by 12 December 2005.
The change to the WLR charging regime is earmarked to take place next year.
Ofcom's initiative forms part of its strategic review of telecoms aimed at improving competitiveness and reducing BT's dominant position.
"What we are aiming to achieve is to give BT's competitors equality of price and access to fixed lines as BT's own retail business," an Ofcom spokesman told BBC News.
"This should allow all phone providers scope for greater innovation and flexibility in what they offer to consumers," he added.