SAYNOTO0870.COM - Terminate the Rate campaign

Dave

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Re: Terminate the Rate gets hopes up on BT savings
Reply #15 - Jun 1^st, 2011 at 11:52pm

Dave wrote on Jun 1^st, 2011 at 6:37pm:

Terminate the Rate has today proclaimed BT delivers on Terminate the Rate promise.

More on this story:

BT to cut cost of calls to mobiles from next weekend - Daily Mail: 21st May 2011

BT cuts mobile call charges from landlines - Which? 24th May 2011
Quote:

Cost of making an evening mobile call drops by 24%

BT has announced it is to cut the cost of landline to mobile calls. Prices will be reduced by 13% during the day and by 24% for evening calls.

Which? appears to have fallen into the trap of thinking that these percentages are reductions in the prices of calls which they are not. They are reductions in the per minute rates; calls attract a 12.5 pence call set-up fee, are rounded up to the next whole minute and rounded up to the next whole penny.

Imagine if shops quoted without taxes, or hey, if petrol stations didn't have to include all the duty on their signs outside. Telecoms companies have engineered these smoke and mirrors and it is all above board.

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« Last Edit: Jun 1^st, 2011 at 11:57pm by Dave »

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Dave Global Moderator Offline Posts: 9,902 Yorkshire Gender:	Re: Terminate the Rate campaign Reply #16 - Jun 2^nd, 2011 at 12:05am Gremlins in the system??? The posting BT delivers on Terminate the Rate promise has disappeared (error 404), yet it's still linked to from the TTR homepage.
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Dave

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Re: Terminate the Rate campaign
Reply #17 - Jun 2^nd, 2011 at 11:51am

Taking this one step further, calculating the actual savings as an average decrease per minute shows that all calls of 1 minute or more benefit by 2 pence per minute or less.

Daytime

Duration (min:sec)	Old cost	New cost	Pc decrease	Average decrease per min
0:30	26p	24p	7.69%	4.00p
1:00	26p	24p	7.69%	2.00p
1:30	39p	36p	7.69%	2.00p
2:00	39p	36p	7.69%	1.50p
2:30	52p	47p	9.62%	2.00p
3:00	52p	47p	9.62%	1.67p
3:30	65p	58p	10.77%	2.00p
4:00	65p	58p	10.77%	1.75p
4:30	78p	69p	11.54%	2.00p
5:00	78p	69p	11.54%	1.80p
5:30	91p	81p	10.99%	1.82p
6:00	91p	81p	10.99%	1.67p
6:30	104p	92p	11.54%	1.85p
7:00	104p	92p	11.54%	1.71p
7:30	117p	103p	11.97%	1.87p
8:00	117p	103p	11.97%	1.75p
8:30	130p	115p	11.54%	1.76p
9:00	130p	115p	11.54%	1.67p
9:30	143p	126p	11.89%	1.79p
10:00	143p	126p	11.89%	1.70p

Evening

Duration (min:sec)	Old cost	New cost	Pc decrease	Average decrease per min
0:30	20p	18p	10.00%	4.00p
1:00	20p	18p	10.00%	2.00p
1:30	27p	24p	11.11%	2.00p
2:00	27p	24p	11.11%	1.50p
2:30	34p	29p	14.71%	2.00p
3:00	34p	29p	14.71%	1.67p
3:30	41p	34p	17.07%	2.00p
4:00	41p	34p	17.07%	1.75p
4:30	48p	39p	18.75%	2.00p
5:00	48p	39p	18.75%	1.80p
5:30	55p	45p	18.18%	1.82p
6:00	55p	45p	18.18%	1.67p
6:30	62p	50p	19.35%	1.85p
7:00	62p	50p	19.35%	1.71p
7:30	69p	55p	20.29%	1.87p
8:00	69p	55p	20.29%	1.75p
8:30	76p	61p	19.74%	1.76p
9:00	76p	61p	19.74%	1.67p
9:30	83p	66p	20.48%	1.79p
10:00	83p	66p	20.48%	1.70p

Daytime and evening rates apply seven days a week. There as no separate weekend rate.

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« Last Edit: Jun 7^th, 2011 at 10:20am by Dave »

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Dave

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Re: Terminate the Rate campaign
Reply #18 - Jun 3^rd, 2011 at 9:42am

Dave wrote on Jun 2^nd, 2011 at 12:05am:

Gremlins in the system???

The posting BT delivers on Terminate the Rate promise has disappeared (error 404), yet it's still linked to from the TTR homepage.

The posting is now not mentioned on the TTR homepage now either. There is now no announcement on TTR's website about BT's price changes, which is rather surprising considering that they are a key milestone in the campaign.

Google has cached the page in question:

http://webcache.googleusercontent.com/search?q=cache:9vvqERB96asJ:www.terminatet...

Quote:

BT delivers on Terminate the Rate promise
June 1st, 2011

In response to Ofcom’s final decision to lower MTRs over the next three years, BT made significant cuts to the cost of landline to mobile phone calls from 28 May 2011.

In the evening, the cost of calling a mobile on all major networks from a BT landline fell from 7p per minute to 5.3p, a 24 per cent cut. During the day, the cost fell from 13p per minute to 11.3p, a 13 per cent cut. This adds extra pressure on companies such as Sky, TalkTalk and Virgin Media who have yet to pass on the savings achieved through the Terminate the Rate (TTR) campaign. Virgin in particular currently charges 31.61p per minute for daytime calls to customers on 3’s network and 19.35p per minute for daytime calls to other mobile operators.

The Terminate the Rate campaign led to Ofcom cutting MTRs and, as promised, BT is now passing on the first of those savings to its customers. BT is also planning to launch the UK’s first ever all-you-can-eat calls package that includes calls to mobiles.

John Petter, managing director, Consumer, at BT said: “Having campaigned for two years to get Ofcom to lower mobile termination rates, I am delighted to pass on the news that calls to mobile phones from a BT landline are to cost a great deal less. We are passing on Ofcom’s reduction and what’s more we’ll soon be telling customers how they can stop worrying about call charges from landlines to mobiles with a new, inclusive consumer calling package. Watch this space.

The "cost of calling" implies the cost of calls as a whole, which includes the Call Set-up fee, but this is not mentioned on this release. Thus, the 24% cut is not a 24% cut in the "cost of calling" mobiles, but just the 'per minute' element of the charge.

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« Last Edit: Jun 3^rd, 2011 at 9:43am by Dave »

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SilentCallsVictim

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Re: Terminate the Rate campaign
Reply #19 - Jun 3^rd, 2011 at 3:01pm

I understand that BT publishes its termination rates, so that one can see the actual margin that it makes on placing calls to cover its own local costs and overheads.

A version of the table shown above could therefore be used to address the key issue - IS BT PASSING ON THE SAVING?

In time we should be able to see how the mobile companies deal with this loss of income. TTR has long operated on the assumption that this will all be a net sum gain for consumers. Withdrawn media releases are one thing - showing that this has simply increased BT margins and loaded greater costs onto mobile users is a more significant dent to this rather dodgy enterprise.

I personally believe that the cost of mobile telephony should be met by those with mobile phones, without subsidy from their callers, however they are consumers too!

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Dave

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BT to Mobile Termination Payments
Reply #20 - Jun 6^th, 2011 at 11:12pm

SilentCallsVictim wrote on Jun 3^rd, 2011 at 3:01pm:

I understand that BT publishes its termination rates, so that one can see the actual margin that it makes on placing calls to cover its own local costs and overheads.

Termination payments BT makes to the mobile companies are in the BT Wholesale Carrier Price List, Section B1, Part 1.02.1.

3

Effective date	Until date	Daytime (ppm)	Evening (ppm)	Weekend (ppm)
01/04/07	31/03/08	9.1	9.1	9.1
01/04/08	31/03/09	7.29	7.29	7.29
01/04/09	30/04/09	11.84	5	2
01/05/09	31/05/09	4.4666	4.4666	15
01/06/09	30/06/09	9	9	2
01/07/09	31/07/09	9.7523	4.8	2
01/08/09	31/08/09	4.6116	3	10.5
01/09/09	30/09/09	9.776	3	2
01/10/09	31/10/09	5	3	10.5
01/11/09	30/11/09	5.7564	5.7564	2
01/12/09	05/01/10	8.3	3	2
06/01/10	31/01/10	3	3	10.5
01/02/10	28/02/10	4.7	4.7	2
01/03/10	31/03/10	8.2493	8.2493	2
01/04/10	30/06/10	13.6511	1.5	1.5
01/07/10	31/07/10	1.5	1.5	16
01/08/10	31/08/10	11.6494	8	0.5
01/09/10	30/09/10	4.93	4.93	0.5
01/10/10	31/10/10	1	1	19
01/11/10	31/12/10	5.1	5.1	0.5
01/01/11	31/01/11	8.2507	0.25	0.25
01/02/11	31/03/11	5	0.5	0.5
01/04/11		2.984	2.984	2.984

O2

Effective date	Until date	Daytime (ppm)	Evening (ppm)	Weekend (ppm)
01/04/07	31/03/08	5.4	5.4	5.4
01/04/08	31/03/09	5.09	5.09	5.09
01/04/09	31/07/09	5.6537	5.6537	5.6537
01/08/09	31/03/10	4.2359	4.2359	4.2359
01/04/10	31/03/11	4.4276	4.4276	4.4276
01/04/11		2.984	2.984	2.984

Orange

Effective date	Until date	Daytime (ppm)	Evening (ppm)	Weekend (ppm)
01/04/07	31/03/08	5.9	5.9	5.9
01/04/08	31/03/09	5.39	5.39	5.39
01/04/09	31/05/09	3.9999	4.01	12.4596
01/06/09	30/06/09	5.9	6.2894	5.82
01/07/09	31/07/09	6	3	2.4849
01/08/09	31/08/09	6.1	2.9	2.9552
01/09/09	30/09/09	6.421	2.498	2.2755
01/10/09	31/10/09	2.868	2.498	11.2116
01/11/09	30/11/09	7.35	2.498	1.2079
01/12/09	31/12/09	6.35	3.498	1.1886
01/01/10	31/01/10	3.268	3.098	8.6143
01/02/10	28/02/10	7.8879	1.0001	1
01/03/10	31/03/10	8.0009	1	1
01/04/10	30/06/10	7.837	1	1
01/07/10	31/07/10	2	2	14.29
01/08/10	31/08/10	7.9942	1	1
01/09/10	30/09/10	4.43	4.43	4.43
01/10/10	31/10/10	1	1	17.3724
01/11/10	30/11/10	8.0606	1	1
01/12/10	28/02/11	4.43	4.43	4.43
01/03/11	31/03/11	4.431	4.431	4.431
01/04/11		2.984	2.984	2.984

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« Last Edit: Jun 6^th, 2011 at 11:30pm by Dave »

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Dave

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BT to Mobile Termination Payments
Reply #21 - Jun 6^th, 2011 at 11:15pm

T-Mobile

Effective date	Until date	Daytime (ppm)	Evening (ppm)	Weekend (ppm)
01/04/07	31/03/08	5.9	5.9	5.9
01/04/08	31/03/09	5.39	5.39	5.39
01/04/09	31/07/09	5.863	5.863	5.863
01/08/09	30/09/09	4.323	4.323	4.323
01/10/09	31/10/09	2.0182	2.0182	12.67
01/11/09	30/11/09	5.1462	5.1462	2.2
01/12/09	31/12/09	4.3232	4.3232	4.3232
01/01/10	31/01/10	2.013	2.013	11.47
01/02/10	28/02/10	4.3232	4.3232	4.3232
01/03/10	31/03/10	5.3283	5.3283	1.1879
01/04/10	30/06/10	4.4213	4.4213	4.4213
01/07/10	31/07/10	1	1	17.335
01/08/10	30/09/10	10.652	1	1
01/10/10	31/10/10	1	1	17.335
01/11/10	30/11/10	7.2293	1	1
01/12/10	31/12/10	4.4213	4.4213	4.4213
01/01/11	31/01/11	3.916	3.916	3.916
01/02/11	28/02/11	4.4451	4.4451	1
01/03/11	31/03/11	4.4474	4.4473	1
01/04/11		2.984	2.984	2.984

Vodafone

Effective date	Until date	Daytime (ppm)	Evening (ppm)	Weekend (ppm)
01/04/07	31/03/08	5.4	5.4	5.4
01/04/08	31/03/09	5.09	5.09	5.09
01/04/09	30/06/09	5.745	5.745	5.745
01/07/09	31/12/09	4.372	4.372	4.372
01/01/10	31/01/10	1.25	1.25	16.472
01/02/10	28/02/10	4.372	4.372	4.372
01/03/10	31/03/10	7.248	1.25	1.25
01/04/10	30/04/10	4.4276	4.4276	4.4276
01/05/10	31/05/10	7.7026	1.25	1.25
01/06/10	30/06/10	7.2819	1.25	1.25
01/07/10	31/07/10	1.05	1.05	19.8262
01/08/10	31/08/10	7.9721	1	1
01/09/10	30/09/10	4.4276	4.4276	4.4276
01/10/10	31/10/10	0.5	0.5	19.7546
01/11/10	30/11/10	4.6694	7	0.5
01/12/10	30/04/11	4.4276	4.4276	4.4276
01/04/11		2.984	2.984	2.984

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« Last Edit: Jun 6^th, 2011 at 11:48pm by Dave »

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SilentCallsVictim

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Re: Terminate the Rate campaign
Reply #22 - Jun 7^th, 2011 at 1:30am

Thanks for the copied table Dave.

Here is my attempt at analysis - anyone is free to approach it differently.

Is it fair to ignoring the call connection fee, which we may assume to deliver a constant margin, and the vagaries of some of the evening and weekend termination fees?

If so, then we can take an average on cost of

4.470

vs.

2.984

- a

33%

reduction, against price reductions of

24%

and

13%

,

Again ignoring the reduced evening and weekend termination fees, we can look at the BT margin.

On daytime calls this fell from

8.530

to

8.316

, but increased as a percentage from

66%

to

74%

.

Likewise for evening and weekend calls, a reduction from

2.530

to

2.316

, but an increased percentage from

36%

to

44%

.

This is allowing for BT's own call origination costs to be covered by the call setup fee. I have not allowed for the fact that many BT calls to mobiles would have been made under its discount scheme, where the previous margin would have been lower. I am told that this scheme is now being withdrawn, rather than adjusted to reflect the new rates. The actual increase in BT's margins on calls to mobiles will be greater than that given above. There is no reason to suspect that call volumes will reduce, if anything they would be expected to increase, boosting BT's earnings yet further.

It is fair to say that callers are paying less and the other telcos who have not passed on any of the saving are obviously more guilty of profiteering. It would however appear that BT's net earnings have been increased as a result of its efforts in the TTR campaign.

We now must wait to see how the mobile companies react to their income being reduced whilst that of the landline companies has increased.

It appears that the warfare between BT and all of its competitors, landline and mobile, is hotting up. This does not augur well for achievement of agreement on any of the measures to increase visibility of non-geographic call charges.

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Dave

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Re: Terminate the Rate campaign
Reply #23 - Jun 7^th, 2011 at 11:08am

SilentCallsVictim wrote on Jun 7^th, 2011 at 1:30am:

Is it fair to ignoring the call connection fee, which we may assume to deliver a constant margin, and the vagaries of some of the evening and weekend termination fees?

The Call Set-up fee, whole minute and whole penny billing are all just techniques these companies use to inflate the cost of calling and must therefore be taken into account in any calculations, as tables do in Reply #17 above.

If call set-up fees are so important (for a "constant margin"), then we would expect inclusive calls to attract them, particularly as there are more and more of them these days, what with the high penalty charges for making calls outside outside of inclusivity.

Also bear in mind that the mobile operators don't charge a 'per call' fee for connecting calls.

SilentCallsVictim wrote on Jun 7^th, 2011 at 1:30am:

If so, then we can take an average on cost of

4.470

vs.

2.984

- a

33%

reduction, against price reductions of

24%

and

13%

,

I think this is a bit too high. Remember that fewer calls are passed to 3, so the weighting of its 5 pence per minute during the daytime should be far less than the other four who were all around 4.43.

SilentCallsVictim wrote on Jun 7^th, 2011 at 1:30am:

On daytime calls this fell from

8.530

to

8.316

, but increased as a percentage from

66%

to

74%

.

Likewise for evening and weekend calls, a reduction from

2.530

to

2.316

, but an increased percentage from

36%

to

44%

.

I've revised my table above. There is no weekend mobile call rate; only daytime and evening rates. This raises another question. Do we think that the abolition of separate low weekend rate for calls to mobiles was done as mitigation to Terminate the Rate?

Even if the Call Set-up fee were to be left out, I believe that the effect of whole minute billing is quite significant and (to a lesser extent) rounding up to the next whole penny.

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« Last Edit: Jun 7^th, 2011 at 1:55pm by Dave »

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derrick Supreme Member Offline Posts: 1,124	Re: Terminate the Rate campaign Reply #24 - Jun 7^th, 2011 at 1:03pm Dave wrote on Jun 7^th, 2011 at 11:08am: Also bear in mind that the mobile operators don't charge a 'per call' fee for connecting calls. Don't give them ideas. .
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SilentCallsVictim

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Re: Terminate the Rate campaign
Reply #25 - Jun 7^th, 2011 at 2:13pm

Thanks for your comments, Dave; all are valid.

I was seeking to address the question:
"Has BT passed on the effect of the reduction in the termination rates to its customers?".

The points you make all challenge my provisional conclusion that it has not.
I would be very interested to see the conclusion reached by an alternative analysis.

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Dave

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Re: Terminate the Rate campaign
Reply #26 - Jun 9^th, 2011 at 11:31am

Whilst the posting on TtR blog might have disappeared, the press release from BT is still there and it is now clear that the blogging was copied from it:

http://www.btplc.com/News/Articles/ShowArticle.cfm?ArticleID=2A59CB1B-97F1-461A-...

Quote:

DC11-120 24th May 2010

BT cuts the cost of calling mobiles from landlines by up to 24 per cent

Virgin to charge around 78 per cent more than BT for landline calls to mobiles

BT today announced that from 28 May it will make significant cuts to the cost of landline to mobile phone calls. This announcement follows BT’s leading role in the Terminate the Rate campaign, which helped persuade Ofcom to lower mobile termination rates.

In the evening, the cost of calling a mobile on all major networks from a BT landline will fall from 7p per minute to 5.3p, a 24 per cent cut. During the day, the cost will fall from 13p per minute to 11.3p, a 13 per cent cut. This announcement adds extra pressure on companies such as Sky, TalkTalk and Virgin Media who have yet to pass on the savings achieved through the Terminate the Rate (TTR) campaign.

…

The headline couldn't be any more misleading. The cost of no call is being cut by 24% because the Call Set-up fee applies to all calls to mobiles.

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« Last Edit: Jun 9^th, 2011 at 11:43am by Dave »

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Dave

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Re: Terminate the Rate campaign
Reply #27 - Jun 11^th, 2011 at 12:25pm

The TtR posting which disappeared has re-appeared:

BT delivers on Terminate the Rate promise

Quote:

In the evening, the cost of calling a mobile on all major networks from a BT landline fell from 7p per minute to 5.3p, a 24 per cent cut. During the day, the cost fell from 13p per minute to 11.3p, a 13 per cent cut. …

This is not true as the "cost of calling" a mobile incurrs a 12.5 pence Call Set-up fee and it is only the 'per minute' element which has been cut, which means that the percentages quoted are not representative of the amount the entire cost of a call has gone down by.

For example:

a 1 minute daytime call has come down from 26p to 24p, a cut of 7.7%.
a 3 minute daytime call was 52p and is now 47p, a reduction of 9.6%.
a 10 minute call during the daytime was £1.43 and is now £1.26, a cut of 11.9%.
a 1 minute evening call has come down from 20p to 18p, a cut of 10%.
a 3 minute evening call was 34p and is now 29p, a reduction of 14.7%.
a 10 minute call during the evening was 83p and is now 66p, a cut of 20.5%.

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« Last Edit: Jun 11^th, 2011 at 12:48pm by Dave »

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