The End of Profit Sharing from 0870 Numbers

[clutchingatstraws]

It looks like the filthy DCA's have lost another income stream and not a minute too soon.

 

Now I know it will be adding to their expenses I may start calling them.

 

The History behind Ofcom’s review of NTS and 0870 numbers

Over the years, the rapid growth and popularity of NTS numbers has resulted in confusion about their pricing structure. There have been complaints from public and consumer lobbies about the lack of price transparency and general dissatisfaction regarding the higher price of non-geographic numbers compared with local alternatives.

Of particular concern is the lack of clarity surrounding 0870 and 0845 which, while advertised as national and local rate respectively, are in essence usually charged at rates exceeding the costs of a typical geographical national or local rate. For example, a caller on a standard package could pay 7.59ppm (pence per minute) for an 0870 call (equivalent to a BT standard national rate) but only pay 3ppm for a geographical national number.*

This confusion has, to a certain extent, been due to the way in which NTS has evolved. When first introduced, 0870 and 0845 numbers did adhere to market prices. In subsequent years, geographic numbers became more competitive while many NTS numbers evolved to fulfil a different function - that of providing an enhanced customer service.

As a result of consumer pressure and parliamentary lobby, Ofcom, the independent regulator for the UK communications industries, has been reviewing the NTS scheme for the last 18 months. Their proposals will have an impact on most businesses.

 

Full story is here:

 

Welcome to 0870advice.com

 

Enjoy:grin: :grin: :grin: :grin: :grin:

[Struggling_Simon]

Nice one! Thanks for the info.

[zazen.warrior]

Very pleased to hear about this, I always view use of these types of numbers as a bad sign on an already unwelcome letter!

[Ian011]

We now know this move was a complete disaster. As soon as revenue sharing was removed from 0870 numbers, most companies simply shifted to an 0844 number in order to retain revenue sharing. A number of companies made the claim they were going to save the caller money by moving from a "national rate number" to a "local rate number"[sic]. With 0844 calls often costing more than 0870 calls, especially from a mobile phone, this simply wasn't true. Additionally, 0844 numbers have never been "local rate" calls.

 

Upon seeing this failure, Ofcom did not proceed with removing revenue sharing from 0845 numbers (it had been rumoured that they would remove it soon after the 0870 measures had been put in place) as it would have likely led to a similar result. However, in anticipation of the removal of revenue sharing, BT had already made 0845 calls inclusive in call plans, and could not easily back out of that offer. This move has brought confusion to the market. Many people claim that revenue sharing has ceased on 0845 numbers. It has not. However, the payout rarely exceeds half a penny per minute and only those businesses with a very large volume of incoming calls receive such a payment. Callers continue to pay a 2p/min Service Charge within the price of the 0845 call. Where BT makes these calls inclusive, the Service Charge is funded from the monthly call plan subscription.

 

BT does not offer a similar arrangement for 0843 and 0844 numbers with a similar leval of Service Charge because they control relatively few 0843 and 0844 numbers in comparison and so mostly pay the Service Charge they collect onwards to other providers.

 

After a period of reflection, a very long period of consultation and a long period of overcoming objections from the telecoms industry, especially from the mobile industry, Ofcom published their new plans in December 2013.

 

On 26 June 2015, all 0870 numbers will return to revenue sharing. This will confirm all 084 and 087 numbers as "expensive", both from landlines and from mobile phones. It will remove the current confusion where 0871 is always expensive but 0870 is expensive from mobiles and cheap or inclusive from landlines. 0845 numbers will continue as revenue sharing, as will all other 084, 087 and 09 numbers.

 

All users of 084, 087 and 09 numbers will be required to declare the level of payment that the caller's telephone provider passes to the called party's telephone provider, irrespective of whether that payment leads to a revenue share payout or not. This payment is currently known as the "enhanced termination rate". It will be rounded up to the next penny and all users of these numbers will be required to declare it as their Service Charge. This will make it very clear that the called party is financially benefitting from the call in some way. Even where there is no revenue share payout, callers are still paying for the running costs of the non-geographic number and for the final-leg call-routing.

 

This new system was originally planned to come into force around June 2014. However, the telecoms industry raised many objections, most of them utterly specious. Ofcom has a legal duty to respond to all objections. This process has wasted huge amounts of Ofcom's time resulting in the plans not coming into effect until 26 June 2015. On the same date, calls to 080 numbers will become free from all mobile phones, funded by users of these numbers paying a couple of pence per minute extra for their running costs.

 

The forthcoming changes from Ofcom are not the whole story. New consumer protection legislation was published by BIS on 13 December 2013 and comes into force on 13 June 2014. This makes it illegal to use 084, 087 and 09 numbers for customer service lines in most business sectors. Users of 084 and 087 numbers can swap to the exactly matching 034 or 037 number. Alternatively they can choose a new 01, 02, 030, 033 or 080 number. The Financial Conduct Authority is expected to publish similar regulations for the financial sector.

 

The Cabinet Office has already published guidance for government departments and public services. It recommends the use of 01, 02 and 03 numbers (and 080 numbers in certain circumstances) and discourages the use of 084, 087 and 09 numbers. Where 08 and 09 numbers are retained, it recommends 03 numbers be used as the "primary" number. Failure to provide an 03 alternative must be explained in writing to ministers.

 

At first glance, returning 0870 numbers to revenue sharing might seem to be a backward step. However, when all of the other measures are also taken into account a pattern begins to emerge.

 

We are rapidly heading towards a situation similar to this:

 

01, 02, 03 - "geographic rate" or inclusive in call plan allowances.

 

071 - 075 and 077 - 079 - "mobile rate" or inclusive in call plan allowances.

 

080 - free call from landlines (and free from all mobile phones by 26 June 2015).

 

084, 087, 09 - numbers with a Service Charge to the benefit of the called party and an Access Charge to the benefit of the caller's telephone provider.

 

Work to tidy various exceptions to the above list and to deal with various issues affecting numbers beginning 0500, 055, 056, 070 and 076 is ongoing.

 

With the recent and ongoing annual reductions in the Mobile Termination Rate, it may one day be possible for calls to mobile phones to be inclusive calls within landline call plans.

 

In an ideal world, "geographic rate", "mobile rate" and the non-geographic "Access Charge" would all be charged at the same, or very similar, pence-per-minute rate, with all three being "inclusive" in call plans, leaving the caller to pay Service Charge on top whenever an 084, 087 or 09 number is called.

 

In future, most 084, 087 and 09 numbers are going to be used for chargeable services that are charged for as the call is made. These include conference calling gateways, cheap international-call gateways, recorded information lines, phone-in quizzes, voting on TV and radio shows, chat-lines, and donations to charity where the call price includes the donation. The user of the number will make their fee clear by declaring the Service Charge.

 

For normal day to day contact with businesses and organisations, callers will mostly be ringing 01, 02, 03 and 080 numbers along with standard mobile numbers, none of which incur extra charges to the benefit of the called party.

Edited February 2, 2014 by Ian011