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Making Freephone Free (Read 2,931 times)
SilentCallsVictim
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Making Freephone Free
Dec 17th, 2010 at 6:07pm
 
The Ofcom consultation on Simplifying Non-Geographic Numbers proposes a change that has long been called for in this forum - 080 and 0500 to be "free to caller" in all cases.

The question of who is to pay the extra cost involved in originating "freephone" calls from mobiles does however need to be resolved.

The Ofcom consultation appears not to address the question of what is to happen as a result of the steadily reducing levels of termination payment for calls to mobiles. It has always been my view that there should be a single answer to both questions.

Ofcom does not state a preference, however its arguments weigh heavily towards replicating the equivalent of the present termination rate premium, i.e. passing the additional cost to the person who is paying for the call anyway - the service provider in the case of Freephone calls.

This seems to me to be counter-intuitive, especially in a situation where Ofcom is seeking to remove external subsidy for the cost of mobile telephony.

Whilst there may have been an argument for external subsidy to get the mobile networks up and running and there remains a social argument for continuing to subsidise the availability of a telephone connection for those of lesser financial means, the former has expired and the latter is poorly answered by a subsidy to all mobile users.

I would argue strongly for there to have to be some equivalent of a "line rental" charge for mobile services. This would (as with landlines) meet the costs associated with receiving incoming calls and also be sufficient to enable services such as Freephone to be provided on the same terms (to service providers) as calls originated from landlines.

I therefore favour the option for Freephone service providers to incur no additional cost for receiving calls from mobiles. The consequences of any alternative approach are likely to be contrary to the objectives of the simplification project.

It is for the mobile providers to determine how their customers pay to meet the costs of the services they offer. They are already facing a much larger issue with the reduction of the incoming termination fees. I believe that the additional costs of not being fully reimbursed for originating Freephone calls should be addressed in the same way, whatever that may be. If they are to continue to rely on call revenues to cover all network operations then call and package charges will have to be increased to meet both situations.

Ofcom has noted that the increased call volumes generated as a result of making Freephone free could cause some Freephone service providers to withdraw altogether, or modify their offering. I see such an effect as unavoidable. The possibility of some seeking to block calls from mobiles because of an additional cost should be avoided. In the context of a "simplification", it would not make sense for Ofcom to propose an alternative range for "free to landline caller" numbers, although having two different classes of Freephone would have to be considered if there were to be two different cost structures. Had the issue not been raised in the context of "simplification", then it could have been proper for Ofcom to offer the idea for consideration.

I hope that other who have contributed to discussions on this topic will add their views.

It will also be interesting to hear 0800Buster and others celebrate success for their campaign! - or perhaps bemoan the shutting down of their business.
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Dave
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Re: Making Freephone Free
Reply #1 - Dec 18th, 2010 at 8:14pm
 
On balance, I agree with the position of the OP. Making Freephone numbers free from mobiles can only come about as part of the program to reduce the cost of incoming calls to mobile networks.

In the mean time, providers should be forced to charge Freephone numbers on the same (or better) terms then geographic and UK-wide (03) calls.


Calling for Freephone numbers to be free from all phone services even when some incur greater "per minute" charges leaves number users (the called parties) paying for the choices of callers. Accepting this as the way forward is akin to accepting that callers should pay for businesses which require more expensive numbers (0845) because they require the features (network routing, queuing etc).
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Heinz
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Re: Making Freephone Free
Reply #2 - Dec 18th, 2010 at 8:26pm
 
Dave wrote on Dec 18th, 2010 at 8:14pm:
On balance, I agree with the position of the OP. Making Freephone numbers free from mobiles can only come about as part of the program to reduce the cost of incoming calls to mobile networks.

If giffgaff can do it, why not others?
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ESSEX COUNTY COUNCIL - How long are you going to continue ignoring government guidelines and RIPPING OFF Council Tax payers with your use of 0845 numbers?
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Dave
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Re: Making Freephone Free
Reply #3 - Dec 18th, 2010 at 8:29pm
 
Heinz wrote on Dec 18th, 2010 at 8:26pm:
Dave wrote on Dec 18th, 2010 at 8:14pm:
On balance, I agree with the position of the OP. Making Freephone numbers free from mobiles can only come about as part of the program to reduce the cost of incoming calls to mobile networks.

If giffgaff can do it, why not others?

giffgaff has taken the decision to provide Freephone calls as a loss leader.
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SilentCallsVictim
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Re: Making Freephone Free
Reply #4 - Dec 19th, 2010 at 5:08am
 
Heinz wrote on Dec 18th, 2010 at 8:26pm:
If giffgaff can do it, why not others?

Ofcom has announced that this is what will happen - they will have to "do it" - I am not sure where the idea that some will not comply came from.

We are discussing how it may be achieved by regulation. Compelling every existing provider to mirror the tactics used by market entrants is to enforce a cartel. If new entrants were to be effectively denied the opportunity to offer competitive benefits over the prevailing norm in order to build up a customer base, the market would be closed. Large established players often have the resources necessary to stamp out new entrants, by matching or exceeding their special deals so as to take out their usp, if they perceive a threat. This need only be applied for as long as is necessary to halt the progress of the interloper. It is arguable as to whether this is a good or bad feature of competitive markets.

Is giffgaff celebrating the Ofcom announcement?
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bbb_uk
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Re: Making Freephone Free
Reply #5 - Dec 19th, 2010 at 6:57pm
 
This is a tough one I think.

I would like to see freephone be free from mobiles as it does landlines now.  However, this is going to come at a cost either to the mobile user or the called party (presumably by way of an increase in cost of the call received when being called from a mobile).

The latter option could potentially reduce the number of companies using freephone numbers due to the extra cost of having a freephone number.

Therefore, this only leaves the mobile company bearing the cost of originating calls to freephone numbers and this wont naturally be done by reducing their profits so that leaves cross-subsidy.  Basically, the mobile companies will raise something to allow for freephone calls to be made.

Calling freephone numbers from mobiles varies from about 15ppm+ last I looked.  It doesn't cost 15ppm to originate the call to a freephone number surely so that means there is a surcharge added to the cost of calling freephone numbers which pays for something else which they have cross-subsidised.

The cost of calling freephone numbers I believe has reduced because I'm sure they used to cost around 40ppm.

So if mobile companies are forced provide calls to freephone actually free of charge then not only does that mean costs will rise in other areas to pay for the freephone calls but whatever else the current surcharge to freephone numbers subsidises.

As SCV mentions, the impending reduction in termination fees forced upon the mobile companies mean that costs will definately have to rise in other areas and/or an increase in monthly tariffs (for those on contract anyhow).

This is why I think its tough decision.  Yes, I want freephone numbers to be free but this unfortunately means increases in other areas to pay for the freephone call and the extra surcharge the mobile companies make from freephone numbers.


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nicholas43
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Re: Making Freephone Free
Reply #6 - Dec 29th, 2010 at 6:45pm
 
I'm probably missing something obvious to everyone else, but I wonder whether we need freephone numbers at all, if Ofcom regulates so that the price of geographic and non-geographic calls is transparent.
Everyone with access to a landline can get included or cheap calls to 01 02 and 03 numbers. Everyone with a mobile has either some included minutes to 01 02 and 03 numbers, or can make a one-minute call for 8p (Asda).  Therefore, companies that want to attract business can advertise 01 02 or 03 numbers, including an option that they'll call us back if we ring (or text) them. This would cost them less than an 0800 number does now.
I don't know how many people rely on street call boxes to call 0800. I think BT makes a huge charge to the recipient for such calls, because I notice that many 0800 numbers do not work from call boxes, and I deduce that there must be an option for 0800 owners to refuse calls from call boxes. I don't know how this affects Childline, for instance. I surmise that distressed children would usually prefer an option to text Childline to call them back on their mobile, and that this would be cheaper for Childline than their present 0800 number.
If 0800 is abolished, we could then have a clear distinction between
1. Honest calls to honest companies that use 01 02 or 03 numbers.
2. Annoying calls to grasping or ignorant companies that use 08xx. I'd like Ofcom to regulate that these have to be charged and advertised on the lines 'costing what (if anything) you would pay to call an 01 02 or 03 number, plus an x pence a minute surcharge, most of which is passed on to whoever you are calling.' (I say 'most', because I assume the telecom providers must deduct a handling fee.)
3. Foolish calls to (more or less) honest companies that use 09, with a similar regulation about making clear the revenue for the recipient.
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SilentCallsVictim
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Re: Making Freephone Free
Reply #7 - Dec 29th, 2010 at 8:01pm
 
nicholas43 wrote on Dec 29th, 2010 at 6:45pm:
I'm probably missing something obvious to everyone else ...

Not at all - there are some good points about Freephone - inclusive packages do diminish its value.

Whilst people continue to make calls outside the period covered by their package then Freephone remains useful - the 4 January prices adjustments will however further encourage use of a package to cover all times when the phone is used. If PAYG deals will remain in place on mobiles after the various forthcoming changes, then this is a clear case where Freephone is a significant feature.

I was not aware of the option to refuse 080 calls from payphones - I would be appalled if this were allowed. It is not discussed in the context of Ofcom's comments about the possibility of 080 calls from mobiles being refused if the recipient had to bear the additional cost.

The Ofcom proposal on 084 and 087 (Business Rate) numbers is very similar to what is suggested. This is being discussed in the main thread covering the consultation.
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