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Who Gets The Money? (Read 60,566 times)
rao
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Who Gets The Money?
Dec 6th, 2012 at 2:50pm
 
My understanding is that a third party company "rents" the 0845 number to the Bank / Local Government Office etc.
The 0845 number provider then "piggybacks" the 0845 number onto the Bank's existing geo. line.
The Bank still pays the service provider geo. line rental.
Presumably, the service provider then pays the 0845 number provider each time the number is dialled and the 0845 number provider then shares the money (or not) with the Bank etc.
So the additional cost over calling a standard telephone number is the money paid to the 0845 number provider.
Sky, for example, include the connection fee and call fee costs to geo. lines in their package, so if Sky charge 10.92p (excl. VAT) connection charge and 5.525p per min. (excl. VAT) call charge to call 0845 numbers, then I wonder how much Sky actually pay to the 0845 number provider.
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SilentCallsVictim
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Re: Who Gets The Money?
Reply #1 - Dec 6th, 2012 at 7:25pm
 
Welcome to the forum and well done with what you have laid out.

It may help to offer some standard terminology which is used to describe who is who.

Service Provider (SP): the person / organisation called - the "bank / Local Government Office" in your example.
Originating Communications Provider (OCP): the caller's telco - Sky in your example.
Terminating Communications Provider (TCP): the SP's telco - the "third party company" in your example.

Once the 0845 call has been terminated at the exchange, it may be routed in any number of ways. Using a line rented from another telco is but one of many possibilities. This phase of the operation obviously has to be paid for in some way.

With each type of non-geographic number an arrangement exists between the OCP and the TCP as to how money changes hands. This is however done on a standardised basis. In the case of all 0845 numbers, every OCP pays every TCP around 2p per minute. It is then for the OCP to decide how much of this to recover from the caller through its call charge.

At present, this 2p per minute, or whatever is the rate for the particular type of number, represents an addition to the "termination fee" which is paid, in the same way that it is hidden within the call charge. When Ofcom introduces the "unbundled tariff", these amounts will be further standardised and brought into the open.

The 2p per minute (in this case) will be known as the "Service Charge" and will have to be declared by the SP.
Whatever is added to give the call charge will be known as the "Access Charge" and will have to be declared by the OCP.
Ofcom intends that there be only one "Access Charge" per tariff, covering all types of number to which it applies.

Ofcom refers to this as "Simplifying Non-Geographic Numbers". Having two separate elements to consider, rather than one, may seem to be more complicated, however the inherent complexity of this arrangement is presently hidden from view - prompting the question which you posed and the answer which has been provided.


How the TCP "shares the revenue" with the SP is a matter between them. One must assume that the benefit derived by the TCP is somehow reflected in the cost to the SP. Any SP which claims that it is not must explain why it is allowing itself to be "ripped off" by its telco.


At the caller's end one would expect the value of the "Service Charge" to be a surcharge on the cost of calling a geographic number, however things are not that simple.

Calls to geographic numbers are now generally included in Call Plans and Bundles and thereby not normally subject to a call charge. Those who call geographic numbers outside the terms of their Call Plan or Bundle incur a "penalty charge". In some cases this "penalty charge" may actually be greater than the call charge for calling some numbers that are subject to a "Service Charge".

The issue is further complicated where the OCP includes calls to some (generally only 0845) such numbers within the terms of its Call Plan. In this case they are currently collecting the Service Charge from all subscribers to the plan.


I will not go further into detail here, however I will comment that certain special arrangements presently apply to BT as a OCP, on top of the general case which is described above. These will be lifted as part of the Ofcom "Simplifying Non-Geographic Numbers" project. In fact, Ofcom has no choice, as BT's share of the calls market has long been below the level where such special regulation could be sustained under the law. Regulation of BT's charges for geographic calls was lifted years ago.

To address the specific points made, in the light of the above:

In this context, the term "Service Provider" is formally used to refer to "the bank", rather than to any provider of telephone service (there is nothing wrong with the use of the term to refer to a telco in standard English).

Once the 0845 call has been terminated at the "0845 exchange" it may be delivered in any number of ways.

The difference in the call charge for a 0845 number and a geographic number is what emerges from two separate elements of a telephone tariff. It will generally be positive, but may be zero or even negative.

One may analyse that difference with respect to the "Service Charge", however the level of the Service Charge is constant for the type of number called, regardless of the call charge levied.

(The term "revenue sharing", alongside some aspects of the unique BT regulations, have naturally given rise to the idea that the amount paid to the person called is determined as a proportion of what the caller pays. There is some truth in the underlying idea, but that is not how it actually works.)

I hope that this is helpful. I also hope that this will all become clearer to everyone once Ofcom has made its definitive announcement about how the "unbundled tariff" will work, early in the New Year. The concept of the "unbundled tariff" should be easy to grasp; the problem will be in relating it to the hideously complicated situation that exists at present.

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Dave
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Re: Who Gets The Money?
Reply #2 - Dec 6th, 2012 at 7:43pm
 
Hello and welcome to the SayNoTo0870.com forum.


All users of 084 numbers receive benefit from their use. They can choose a 03 number if they don't wish to benefit but require a non-geographic number.

The Unbundled Tariff, which Ofcom is expected to announce soon as being the way forward, will expose the situation as it stands now.

Call providers have a "termination charge" levied on them for connecting calls and this is imposed by the telephone provider of the destination number. For 084 (and 0871/2/3 and 09 numbers) the termination charge is inflated so as to pass a subsidy to the provider of the number (and therefore its customer for whom it is acting as an agent). This is the "benefit" I refer to and under the proposals it is referred to as the "Service Charge".

Each call provider (Sky Talk, BT, TalkTalk etc) will be required to publish their "Access Charge" for these numbers and this will be the amount they add on to the Service Charge (different Service Charges apply for different 08/09 numbers).

It will then be clear to see how much each call provider adds to these calls (the Access Charge) and how much each Service Provider (user of 084 number) benefits (the Service Charge). That is, the two will be separated for all to see.


What happens to the Service Charge is irrelevant as far as the customer of the user of the 084 number (e.g. customer of the bank) is concerned.

However, where revenue is paid directly to the Service Provider (e.g. bank), this comes out of the Service Charge. Thus, the amount that the phone provider of the 084 number retains is the Service Charge less that revenue payment. So in fact the revenue payment isn't something that is "shared" as such, but it is what is left over of the Service Charge once the 084 provider has taken its cut for provision of the service to its customer.
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« Last Edit: Dec 6th, 2012 at 7:45pm by Dave »  
 
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rao
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Re: Who Gets The Money?
Reply #3 - Dec 7th, 2012 at 8:39am
 
Thank you for your replies.
Most enlightening.
It is a great pity that these explanations are not more widely available.
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Re: Who Gets The Money?
Reply #4 - Dec 7th, 2012 at 1:07pm
 
rao wrote on Dec 7th, 2012 at 8:39am:
Thank you for your replies.
Most enlightening.
It is a great pity that these explanations are not more widely available.

We must hope that Ofcom will be effective in what it is genuinely trying to do.
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Re: Who Gets The Money?
Reply #5 - Dec 8th, 2012 at 1:58am
 
SilentCallsVictim wrote on Dec 7th, 2012 at 1:07pm:
rao wrote on Dec 7th, 2012 at 8:39am:
Thank you for your replies.
Most enlightening.
It is a great pity that these explanations are not more widely available.

We must hope that Ofcom will be effective in what it is genuinely trying to do.
Ofcom is only interested in silencing consumers. Early consultations attracted hundreds of responses from the general public. More recent ones attracted very few. The regulator has therefore succeeded. It created this monster and it could, if it wished, get rid of it just as quickly. It will not as there are too many vested powerful interests. We can debate service charges, access charges and call cost verbiage as much as we like, but it still brings us no closer to resolving the core problem - the public is subsidizing telephone systems through premium call rates to regular numbers where no such premium is warranted.
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As from November 21, 2013, I no longer participate in the forum and am unable to receive private messages.
 
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Re: Who Gets The Money?
Reply #6 - Dec 8th, 2012 at 2:38am
 
idb wrote on Dec 8th, 2012 at 1:58am:
… the public is subsidizing telephone systems through premium call rates to regular numbers where no such premium is warranted.

Exactly. The essence of the unbundled tariff is to cause the person who choose to impose this premium, and benefits from it, to declare it.

Does this not offer some hope of unwarranted premiums being withdrawn?

Similarly, the telcos who take advantage of the premiums by applying their own unjustifiable markup will be required to declare that separately.

Ofcom will not slay the monster - that is not its intention. The monster is too well liked by telcos, which can use it to sell cheap systems to businesses, who may well not even be aware of its true nature. Ofcom intends only to make the monster more visible, so that it may be subject to "market forces". It is for us to ensure that those of its tentacles which cannot bear exposure to light are caused to whither or be cut off.
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« Last Edit: Dec 8th, 2012 at 10:53am by SilentCallsVictim »  
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Re: Who Gets The Money?
Reply #7 - Dec 8th, 2012 at 9:47am
 
When faced with the message "Call us now on 0842 789 7890 (service charge of 3 pence per minute applies, plus your standard network access charge)" I guess that at least initially, most people will dismiss the access charge as likely to be only a couple of pence, and not look it up, when in fact it can be anything up to about 35 pence per minute from mobile phones.

The parallel here is that voting for contestants on TV shows, entering competitions, and donating by text is already done in a similar way: "Text the word 'donate10' to 12345. The text message will cost you 10 pounds plus your standard network charge", but here the "network charge" is a small amount (perhaps 10 to 12 pence) compared to the main payment amount. For phone calls to 084 and 087 numbers it's the other way round: the benefit to who you are calling is only about 1 to 5 pence per minute for a total call price of up to 41 pence per minute.

As well as the consumer being ripped off, the companies employing 084 and 087 numbers for their customers to contact them have themselves been ripped off by the telecoms companies adding the huge access charges on top of the service charge while using terms like "lo-call" rate to try to hide that fact from all parties. I do hope the new way that call prices will have to be publicised pushes those call prices down once it becomes clear to the paying public who is making what out of these types of calls. Most people would assume that the called-party are the ones taking the major share of the money, when in fact that is not the case when calling from a mobile phone.
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« Last Edit: Dec 8th, 2012 at 11:32am by catj »  
 
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Re: Who Gets The Money?
Reply #8 - Dec 15th, 2012 at 5:54pm
 
As a result of the replies I received on this forum I addressed the following question to SkyTalk, who are my call provider.

"Many organisations are now forcing their existing customers to use 0845 numbers.
These organisations are getting wise to the well known website “sayno to 0870.com” and blocking all the listed geographical line numbers, referring the caller to an 0845 number.
Even the “call from oversees” geo. numbers are blocked to UK callers.
These organisations often claim that these calls are at “local rate”.
Certain call providers, eg BT and TalkTalk, include 0845 calls in their call package.
I recently tried to call Santander Bank without using an 0845 number.
I failed.
I currently have a Sky Talk Anytime package which excludes calls to 0845 numbers so this prompted me to find out how much a 10 minute call to Santander using an 0845 number would cost.
Sky will charge me 13.1p connection fee and 6.63p per minute making the cost of the 10 minute call 79.4p
I believe that the Terminating Communications Provider, who receive the 0845 call and route it to Santander on the Santander geographical number, charge approximately 2p per minute.
As I have a SkyTalk package that is basically free to geographical numbers, then my understanding is that any connection fee is part of the free call.
So this is how I believe (although I could be wrong) the cost of the 10 minute call is split.
Terminating Communications Provider/Santander 20.0p
VAT man 13.2p
Sky 46.2p
If this breakdown is correct, then the chances of Sky including 0845 numbers in their call package is not very great. My problem is that I am finding it more and more difficult to find geographical numbers to call organisations and believe me more organisations are going down the 0845 route and blocking goegraphical numbers.
I have two questions for Sky.
Why do you apparently charge your call package customers so much to make 0845 calls when your additional cost only seems to be 2p per minute
Also, do you have any plans at all to include these numbers in your call packages, as I’m sure there are many of your customers who will be forced to migrate to an alternative call providers who do include such numbers."

Reply
"These numbers are chargeable because they are premium rate numbers. Unfortunately there are no plans at the moment to include this through our calls package."

So, Sky consider 0845 calls as premium rate calls.
I also contacted Santander who emphatically informed me that 0845 numbers were a local call and they had no intention of releasing geographical numbers especially since 0845 calls were free with BT.
It was very interesting to find out that very few people seem to know (or care) that the call providers benefit the most. Most people assume (as I did) that the beneficiaries of 0845 numbers are the service providers.
Even if OFCOM do introduce new rules regarding cost transparency, I have a horrible feeling that this situation will become the norm. as more organisations transfer to 0845 numbers.
SAYNOTO0870 can only work if the geographical lines remain accessible. Is my Santander experience only the start.
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Re: Who Gets The Money?
Reply #9 - Dec 15th, 2012 at 9:25pm
 
Including in packages calls to numbers that carry a premium (or benefit) to the user is not the answer. This simply means that all subscribers to the provider in question cover the cost of the premiums run up by some customers. It also gives users of these numbers an excuse to make out that they don't benefit by citing the exceptions such as Santander. This is a practice which really annoys me as they are actively trying to cover up the fact that they benefit rather than being open about it, which is the point of the Unbundled Tariff.
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Re: Who Gets The Money?
Reply #10 - Dec 15th, 2012 at 10:05pm
 
There's no way that premium rate calls can be included in call packages, unless the price of the package is massively inflated or the cost is spread across all customers, otherwise phone companies would make a loss on those calls passing on a larger premium than they charge customers for placing the call.



While 09 numbers are controlled "Premium Rate Services", 084 and 087 numbers are also effectively "premium rate" due to the revenue share arrangements.

Only 0870 has any real chance of being charged the same rate as 01 and 02 numbers from landlines, as this prefix no longer allows revenue share. There was a point when it looked like 0845 might also go the same way, but that's very unlikely to happen now.

0871 and 0872 (and 0873) numbers are now also regulated by PhonepayPlus, in the same way that 09 numbers are.

(0842 and) 0843 and 0844 are revenue share numbers, generally charged at a lower rate than 087 numbers when called from landlines.

From landlines and from mobiles, 084 and 087 numbers (with the exception of 0870 sometimes) cost more to call than calling geographic numbers.

It's looking likely that 0870 will revert to revenue share and also be PhonepayPlus regulated next year. Whether 084 numbers will also become PhonepayPlus regulated is anyone's guess.

Regulation that keeps the price of 084 and 087 numbers down when called from BT landlines ends soon; prices can only go up.

The public are confused for many reasons:
- there's 4 types of numbers: 0842,3,4 - 0845 - 0870 - 0871,2,3;
- companies have been allowed to get away with falsely calling these things "local rate" and "national rate" for nearly a decade;
- this fascination with telling the public that "calls cost x pence from a BT landline" when the majority of calls are made from landlines other than BT and from mobiles.

Eventually the ASA might get their act together and make companies give sensible pricing announcements. None of this "other providers may cost more" garbage. My preference is for "calls cost up to 15 pence per minute from a landline and up to 42 pence per minute from mobiles", which is more like the truth for 084 and 087 numbers.

It's looking like phone companies will have to tell you how much the access charge will be and advertisers will have to tell you what the service charge will be. Having to declare their "cut" may be enough for some companies to drop these numbers.

The whole business is very complicated, and indecision and misdirection from Ofcom for many years hasn't helped - but is belatedly being addressed in some of the changes that might be coming up next year.

The Consumer Rights Directive will make a lot of current 084 and 087 users shift to using 03 numbers.

I do hope that itemised phone bills will separately show the connection fee, access charge and service charge for each call, not just show you the total.



I do wonder what will happen to pricing, especially from mobiles. Currently all calls to 084 and 087 numbers will be, for example, 35 pence per minute when called from network A and 41 pence per minute when called from network B.

A caller calling a particular 08 number will cause their mobile network to pass perhaps 5 pence per minute on, while calling another number might cause 10 pence per minute to be passed on. This effectively means that the access charge varies for the number called as well as the service charge varying; with both adding up to a total of 35 pence for customers of one network and 41 pence for customers of the other network.

The current situation is that after the service charge is taken out, the callers network retains the difference. If a business chooses a phone number with a lower service charge, that reduction is not passed on to the customer, the callers network retains it as extra profit. The benefit (if it can be called a benefit) of the current situation is that you know that calls to 084 numbers are going to be 35 pence per minute.

When the new pricing arrangement comes in next year, if all 084 numbers have a fixed access charge per provider and a variable service charge, it will cost a different amount per minute for each 084 number called, varying as the service charge varies. Unless this is properly explained there's going to be a heck of a lot of confused customers out there.

Will the total call price be capped, or will it be (individually) the service and access charges that will be capped?

For the mobile network currently charging 35 pence per minute for 08 calls and passing 5 to 10 pence per minute on, they currently retain 25 to 30 pence per minute depending on the actual number called. Will they in furture set their access charge at 25 or at 30 pence per minute for all calls? That will make the calls cost 30 to 35 pence OR 35 to 40 pence on the customers bill, instead of the current situation of a fixed 35 pence per minute for all those calls.

Or will the current situation prevail, where the access charge will continue to vary for different 084 numbers?

Will the new regime cause bills to generally rise or fall?
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« Last Edit: Dec 16th, 2012 at 12:05pm by catj »  
 
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Re: Who Gets The Money?
Reply #11 - Dec 16th, 2012 at 3:27am
 
The following comments and answers are based on the latest declared Ofcom position.

The forthcoming statement, expected in January, will represent the final position on many points.

catj wrote on Dec 15th, 2012 at 10:05pm:
While 09 numbers are controlled "Premium Rate Services", 084 and 087 numbers are also effectively "premium rate" due to the revenue share arrangements.

0871 and 0872 numbers are now also regulated by PhonepayPlus, in the same way that 09 numbers are
.…
It's looking likely that 0870 will revert to revenue share and also be PhonepayPlus regulated next year. Whether 084 numbers will also become PhonepayPlus regulated is anyone's guess.

PhonePayPlus only regulates services provided on numbers that are classified as being for the provision of "Premium Rate Services". This includes 0871/2/3. It is assumed that 0870 will readopt a similar level of Service Charge and therefore (re-)join this group.

It would make little sense for 084 numbers (with the present level of use) to be regulated by PhonepayPlus. This is not what is proposed.

My personal view is that the 084 range will have to be re-assessed after we have seen the actual effect of the requirement for Service Charge declaration. It is my belief that the vast majority of 084 users could not sustain this use with the Service Charge declared. (I can see only very few situations where a Service Charge of less than 10p per minute could be justified, given the true cost of handling a voice telephone call.) Ofcom does not share this view, however it is adamant that the Service Charge declaration must be effectively enforced.

catj wrote on Dec 15th, 2012 at 10:05pm:
I do hope that itemised phone bills will separately show the connection fee, access charge and service charge for each call, not just show you the total.

Ofcom is determined that this information be given on bills. It may be that the relevant rate of Access Charge will be shown separately, with the calls to which it applies being marked, although showing only the total call cost.

My view is that the emphasis needs to be on the Service Charge and Access Charge being clearly known by the caller BEFORE they decide to make a particular call. So long as the relevant elements can be checked and extracted from the information given on a bill, I am content.

(N.B. Ofcom is strongly opposed to the use of a connection fee and a rate per minute together. It sees a flat connection fee as only being applicable as an Access Charge alongside a fixed fee Service Charge. Where the charge is per minute, Ofcom is prepared to tolerate a minimum duration as the only means of covering the costs incurred in connecting the call.)

catj wrote on Dec 15th, 2012 at 10:05pm:
Will the total call price be capped, or will it be (individually) the service and access charges that will be capped?

The Service Charge will be set for all calls to the number, within limits for each group of numbers, e.g. 0845, 0844/3, 087.

The Access Charge will be set for all calls under the terms of a particular tariff.

The problem with "caps" on prices that are otherwise set in a market is that they readily become the fixed charge. If a cap were to be set on the level of the Access Charge, so as not to restrict the potential for a new mobile provider to enter the market, then this could swiftly become the level charged by everybody. Service Providers would refer to the Access Charge as being up to xx pence per minute, setting an expectation which anyone wishing to charge less would find hard to overcome.

Ofcom has now clearly stepped away from caps as a preference. I think it likely, and right, that the option to apply caps be held back until one sees how they may perhaps need to be applied to cover specific aspects of the market position that develops.

catj wrote on Dec 15th, 2012 at 10:05pm:
For the mobile network currently charging 35 pence per minute for 08 calls and passing 5 to 10 pence per minute on, they currently retain 25 to 30 pence per minute depending on the actual number called. Will they in furture set their access charge at 25 or at 30 pence per minute for all calls?

Ofcom is determined that there be only a single Access Charge, although I believe that it may permit a dual system, with a higher rate of Access Charge for the higher rated PRS numbers.

The present absurdly high rates of Access Charge for lower rated ranges on mobiles are a feature of the bundled tariff and a desire to have only a small number of charge bands. Given that retail providers will only have to worry about setting their Access Charges, and there will be no more than two of them, this particular issue will go away. I believe that Access Charges will be sufficiently visible to ensure that they are set at reasonable levels.

(continued …)
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Re: Who Gets The Money?
Reply #12 - Dec 16th, 2012 at 3:28am
 
(… continued)

catj wrote on Dec 15th, 2012 at 10:05pm:
Will the new regime cause bills to generally rise or fall?

In the present shrinking market with high inflation, the real cost of telephone services is currently on the rise. This will inevitably be reflected in every price revision that occurs whilst these circumstances pertain. It is also inevitable that Ofcom will be blamed, whenever there is an opportunity to do so.

One would expect the most marked effect to be with BT prices, given that regulation which restricts its prices is to be lifted. This will also affect those who shadow BT rates.


Given that there is a genuine competitive market in effect only covering some aspects, and that the changes will open up market effects in places where they have not been seen, it is hard to predict how far competition will bear on the situation. The levels of Service Charge will essentially remain at the present (bundled) levels. No telco has given any indication of the likely levels of Access Charge. It is possible that Access Charges may be offered (or compulsorily included, as advocated by some) within Call Plans and packages.

Implementation of these changes will coincide with the final stage of the reduction of the mobile termination fee. This will mean that the cost of providing a call from a landline to a mobile will be broadly the same as that to a landline. This will open up the possibility of unlimited (or bundled) calls to mobiles being commonly offered within Call Plans. It is therefore highly likely that a major reconfiguration of Call Plans will take place.


There is no doubt that there will be a major effect on the market for provision of business services, given that the hidden subsidy offered by 084/087 numbers will no longer be hidden. The cost of 080 numbers will also increase, due to the increased volumes and higher unit costs caused by making calls free to mobile callers. I believe that business telephony users will (, in some cases, choose to) incur higher costs, providing an excuse for raising their own prices.

I am personally of the view that those who cannot justify a Service Charge must swiftly move to 03 or geographic numbers. More controversially, I believe that a justifiable Service Charge must represent a reasonable proportion of the cost of handling a person to person telephone call; this is not achieved by a rate of less than 10p per minute.


Telcos will feel pinched from many sides. In such situations any business will look to see where it can recover lost revenue with the minimum effect on its competitiveness. One soft target will have been removed from the list of such opportunities, so others will have be used. This will undoubtedly have an effect on telephone bills, but it is impossible to say where or what.


In a flat economy with inflation, price rises are a simple fact of life, as businesses struggle to survive. Separating the true cause from the reason given is a game that we can all play. There is no question that aspects of the changes leave them open to being blamed. This will happen. Those who oppose the transparency have already attacked the effect of increased prices in their consultation submissions (I refer, in particular, to Citizens Advice and NEG).

It is an issue of timing. The changes being introduced are essential to improve transparency and equity. I would not wish to suggest that Ofcom delayed the changes until the situation of the economy was such that they would be less likely to be blamed for higher bills.


The above is in response to the question about the overall effect. There will be many call charges that will plummet. There will also be increases that are unfairly blamed on the changes.

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Re: Who Gets The Money?
Reply #13 - Dec 16th, 2012 at 12:24pm
 
Wow.
Having innocently started this thread in order to understand the situation, I now feel I have intruded on a private conversation.
Anyhow, fascinating reading and very informative. Thank you again.
As it it obvious to me that my knowledge level is "Conference" and most of you guys are "Premier League" then allow me to make a few points, perhaps on behalf of the silent majority.
I always believed that premium rate numbers were introduced to allow service based companies to carry on their businesses over the telephone or via a broadband connection.
These were 0870 numbers.
However, the new breed of manager now running UK companies decided that their companies could become more efficient by centralising their telecommunications functions, adopting the call centre concept and providing their customers with an 0845 number, which had somehow been accepted by most people as making a "local call" from anywhere in the country.
If this was in fact true, then fine.
However, the premium rate number providers then discovered that they could "sell" the "local call" concept to many diverse organisations, such as doctors surgeries, dentists, government departments et al.
The selling proposition seems to have been call revenue sharing or "free telecoms equipment".
It then seems that call providers decided they would like to "eat at the trough" and 0845 numbers quickly premium rate numbers but with the attraction of being able to be "sold" to the public as "lo-cost" or even worse "local calls".
Why does it always seem that the UK has become "rip-off" capitol of the world. Why do I have to phone a premium rate number to talk to my local library.
Why, when I buy into the concept of on-line banking, do I now find that I an forced to phone the equivalent of premium rate numbers if I have a problem.
Reading the posts it seems to me that an acceptance of the situation is developing. A bit like the drip feed techniques used by government departments.
Please don't get me wrong, I am not criticising the previous posts or the contributers.
It is just that apparently, I naively believed that this website and forum was about getting rid of premium rate numbers.
Perhaps it is and I just don't understand.
All I want to do is to be able to make telephone calls and pay a fair and correct rate to my selected call provider.
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« Last Edit: Dec 16th, 2012 at 12:26pm by rao »  
 
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Re: Who Gets The Money?
Reply #14 - Dec 16th, 2012 at 1:14pm
 
Quote:
Having innocently started this thread in order to understand the situation, I now feel I have intruded on a private conversation.

Not at all. In the replies from Dave and SCV you have answers from two of the UK's foremost experts on the subject matter. By publishing the information in a forum, the answers are available to a wide readership.  Smiley

Quote:
I always believed that premium rate numbers were introduced to allow service based companies to carry on their businesses over the telephone or via a broadband connection.
These were 0870 numbers.

It depends what you mean by "premium rate".

09 numbers are Premium Rate Services (PRS) with heavy regulation.
084 and 087 numbers where revenue sharing is allowed are "premium rate" with a small "p".

0870 used to exist as 0345 and 0645 in the 1990s. Back then, calling a local landline e.g. 0303 (now 01303) based on your own location was cheap but calling a distant landline e.g. 041 (now 0141) was expensive.

The non-geographic "local rate" numbers were brought in so you could ring your bank head office or the gas or electric board at the other end of the country for the same price as a local call. This was a Good Thing.

Number prefixes got switched around in 1995 and 2000 but several years later (2005?) landline companies
1. stopped charging different rates for 01 and 02 numbers based on distance called.
2. introduced "inclusive packages" where calls to 01 and 02 numbers during the evenings and weekends were free, and charged per minute during the day,
3. and latterly introduced packages where all calls to 01 and 02 numbers are free at all times. The latter option rapidly became the most popular.

Now that most people pay nothing for 01 and 02 calls, and now that "local rate" doesn't exist, all 08 numbers that have a revenue-share arrangement are "premium rate" (small p) numbers. That's 0842,3,4, 0845 and 0871,2,3.

0870 was "premium rate", but the revenue share was stopped in 2009 or so and some landline providers now allow 0870 in with inclusive calls.

Quote:
However, the new breed of manager now running UK companies decided that their companies could become more efficient by centralising their telecommunications functions, adopting the call centre concept and providing their customers with an 0845 number, which had somehow been accepted by most people as making a "local call" from anywhere in the country.
If this was in fact true, then fine.

0845 was "local" in the early days - but not true since 2006.

Quote:
However, the premium rate number providers then discovered that they could "sell" the "local call" concept to many diverse organisations, such as doctors surgeries, dentists, government departments et al.

By the time the mass-sell of "local rate" numbers began, these numbers were no longer "local rate". There's a number of complaints to the ASA about this in 2006 and they were all upheld. A cursory Google search will show the vast majority of providers of 084 and 087 numbers still advertising them as "get a local rate number for your business".

Quote:
The selling proposition seems to have been call revenue sharing or "free telecoms equipment".

It does, with the hiding of the true costs to callers by the use of meaninglass and illegal "local rate" and "national rate" nomenclature, as well as the weazel words "other operators and mobiles may charge more" when the truth is "will" instead of "may" and "a lot more" in place of "more".

Quote:
It then seems that call providers decided they would like to "eat at the trough" and 0845 numbers quickly became premium rate numbers but with the attraction of being able to be "sold" to the public as "lo-cost" or even worse "local calls".

Any number with revenue share is by definition "premium" (small p). I'm sure that most businesses that advertise their number as "local rate" do so because that is what they believe they have signed up for, and what the number provider told them they were selling.

Quote:
Why does it always seem that the UK has become "rip-off" capital of the world?

Because we have huge amounts of regulators who either do nothing, or take ages to take action.

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Why do I have to phone a premium rate number to talk to my local library.
Why, when I buy into the concept of on-line banking, do I now find that I an forced to phone the equivalent of premium rate numbers if I have a problem?

The Consumer Rights Directive should force most of these cases to migrate to an 03 number. 03 numbers cost the same as 01 and 02 from mobiles and from landlines.

Quote:
Reading the posts it seems to me that an acceptance of the situation is developing.

There's little "acceptance" by the public of being ripped off. The Consumer Rights Directive will be a Good Thing - if it is enforced.

Quote:
It is just that apparently, I naively believed that this website and forum was about getting rid of premium rate numbers.
Perhaps it is and I just don't understand.

Different people here have different agendas. There's no way that anyone is going to be able to "get rid of premium rate numbers". There are certain businesses where the caller should be paying extra for the call. There are many where this is not acceptable.

Some responsible companies have woken up and swapped to 03 or to 01/02 numbers. For those that haven't, this site acts as a  clearing house for the sharing of numbers where the caller is not ripped off.
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« Last Edit: Dec 16th, 2012 at 2:17pm by catj »  
 
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