Useful Information & Say no to 0870! Hot Topics

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"Calls to 0845 are local rate and calls to 0870 are national rate, so what's the problem?" Of course we wouldn't be here if it really was as simple as this.

In brief, what has happened is that the cost of calling geographical numbers (those starting with 01 or 02 prefixes) has fallen due to competition. However, due to the fact that it costs telephone companies more to connect to 0845 and 0870 numbers, the cost of these hasn't really fallen.

The important point to note is that the link with 0845 being charged at the rate of a local call only applies on BT's non-discounted tariffs/rates. Similarly, 0870 is only charged at the rate of a national call those same tariffs. The thing is that BT's non-discounted rates are effectively what it cost before competition brought down the price of telephone calls.

Or to look at it another way, BT Together is BT's latest offering which competes with other providers. This is a BT 'discounted' tariff, where calls to these non-geographical numbers are charged at nearly as much as at non-discounted rates.

What's more, in July 2004 BT removed its principal non-discounted tariff, BT Standard, and moved some nine-million customers onto BT Together Option 1 (see here). This has left a very tiny minority on non-discounted tariffs, such as those on the Light User Scheme.

Whilst the problem has been around for many years, this change meant that whatever Oftel's (now Ofcom) thinking was to allow these titles to be attributed in the first place must surely be no more. But mud sticks. Now many companies either still call them by their familiar titles or don't refer to any type of pricing at all. So how are consumers, and businesses for that matter, meant to know what's what?

The telecommunications providers who supply the 0845 and 0870 numbers are rewarded at the caller's expense, so why would they want to make a song and dance about the true cost of calling them? They use this to provide the number and its services to the company being called. We are subsidising the number! This is why telephone providers can't lower the price of calling these numbers in the first place.

The price of a telephone call should be just that, and any number which benefits the called party financially is premium rate, whether it costs 1p or £1.50.

Businesses are either kept in the dark and carry on the "national rate" half-truth or are in on the act and are just playing along. Many (especially with 0870) receive revenue. There are no regulations in place as there are with 09 premium rate numbers, such as the ban on call queuing.

Not only that, but BT generally undercuts other providers for 0845 and 0870 with BT Together rates. On BT Together you pay 7p/min plus a 3p call set up fee, in the daytime. To get an idea of how much it costs to call these numbers from landline and mobile packages and public payphones, see this price comparison.

It's also worth bearing in mind that all of today's tariffs (with the exception of BT's non-discounted ones) charge the same for a local and national call, thus distance doesn't make a scrap of difference. It did seem pointless having national rate non-geographical numbers in the first place, as they disadvantage those locally to any business using them. But, hey, we're not called Rip-Off Britain for nothing!

The more and more companies and organisations that jump on the bandwagon, the less benefits today's telephone packages provide. Those telcos that charge more for 'all inclusive' calls don't include calls to these numbers. All the numbers are doing is stiffling competition.

See also this article about 0870 on Martin Lewis' site, Money Saving Expert.