The CRP▸ has an 0845 number - and it looks like turning that to an 0345 might be sensible. We've no desire to have people pay a lot of money, we've no desire to make money out of them (I don't think - add to agenda for next meeting, as it could help fund us if people pay for an enquiry service), but we don't want to provide a free alternative to other professionally manned and costed services, nor do we want that down side we have with the 0800.
So far, I had dealt only with details of costs incurred by callers. In light of the above comment, a few words on the costs incurred by users and how what the caller pays relates to that, seems like a good idea.
The caller pays their telephone company for the call. When calling an 01, 02 or 03 number, this is either at a set per-minute rate or by purchasing a bundle or "package" of calls for a monthly fee. On landlines, this package tends to be an unlimited amount, but in some cases only for use at certain times of the day or on certain days. In the last couple of years AnyTime deals have proved the most popular by far. On mobiles, the call package is usually a fixed number of minutes per month, but can be used at any time of the day.
During each call to a normal 01 or 02 number, the originating telephone company pays the terminating telephone company a "termination fee" of perhaps 0.1p or 0.2p/min to cover their costs in routing the call to the call recipient. The call recipient pays nothing to receive the call and makes no money from the call.
It's also worth noting that when a call is made to a mobile phone, i.e. a call to an 07 number, the termination fee is much higher at several pence per minute. This is why calls to mobile phones from landlines cost more and are not inclusive in call packages. Ofcom has already forced a large reduction in the "mobile termination rate" over the last few years. More reductions are planned, and in 2015 it should be much lower than now - low enough for landline companies to start to allow calls to all
UK▸ mobiles within their inclusive call bundles.
Non-geographic numbers begin 03, 08 and 09 and usually "sit on top" of a normal 01 or 02 geographic number. With these calls there are two parts to the call journey. The first leg is from the caller via their telephone company out to the company that owns the non-geographic number and handles and processes the call. That company stacks and queues the calls, play various announcements, and then forwards the calls one at a time to the final destination, usually a normal landline number. The destination can be altered based on time-of-day, call volume, location of call origination, or dynamically in several other ways. These call features and the final leg of the call journey to the call recipient's phone via their telephone company have to be paid for. The fees are higher if the call is routed to a mobile phone or to an international destination.
There are several general principles as to how calls to non-geographic numbers are charged. Depending on the number type, the call recipient might pay none, part, or all of those extra fees, or the caller might pay none of them or may pay for part or all of them through an inflated call price.
It is important to realise that the exact same call features are available on 03 (030, 033, 034, 037), 08 (080, 084, 087) and 09 (090, 091, 098) numbers and that the differences between these numbers simply boil down to who pays for those extra features. Additionally, when the caller pays higher fees for the call, and those fees exceed the level of the non-geographic call handling costs incurred on the final leg, the call recipient may receive a revenue share payment and earn money from the call (0843, 0844, 0871, 0872, 0873 and 09; and from 2015 also 0870). Even when there is no revenue share payout, the caller paid extra and that fee covered some, or most likely all, of the call recipient's call handling costs (0845 and the lowest price 0843 and 0844 calls). Where the caller pays no extra fees (03, and temporarily 0870), all of the final leg call handling costs have to be met by the call recipient. Where the caller pays nothing at all (080), the call recipient has to pay the fees for both ends of the call.
When a caller places a call to an 03 number, the call must be charged to the caller at no more than the rate they would pay for calling an 01 or 02 number. The caller pays no extra fees. This means the call recipient pays for the non-geographic call features and final-leg call routing. This is often at a rate around 1p or 2p/min, but will be more if the call is routed to a mobile phone or to an international destination. Many phone companies are offering thousands of "inbound" minutes for a few tens of pounds per month.
When the call is from a landline to a freephone number, either 0500 or 080, the caller pays nothing for the call. The call recipient pays the same "final leg" fees as above. The call recipient also has to pay a bit extra in order to compensate the caller's network for carrying the call. This "call origination fee" is no more than a couple of pence per minute and it adequately covers the cost of call origination from landlines.
When a mobile operator originates a call to a freephone number they are paid the same "call origination fee". However, their call origination costs are slightly higher than those incurred by landline operators and the "call origination fee" doesn't quite cover their costs. In this case, most mobile networks also charge the caller something for the call. It would be reasonable for this fee to be a couple of pence per minute, perhaps 5p/min at most. However, we all know that mobile phone networks are greedy. They currently charge anything up to 41p/min to call freephone numbers. Ofcom have proposed that, in future, users of freephone numbers pay a slightly higher "call origination fee" and these calls become free from all mobile phones. Mobile phone networks, especially EE, have strongly objected to this proposal. Presumably they want to continue charging the caller 40p/min instead of receiving several pence per minute from the number user. Users of freephone numbers clearly want people to be able to call them at no cost and so this change should be implemented at the earliest opportunity.
The forthcoming increase in fees for using 080 numbers coupled with an increase in call volumes once these calls are also free from mobiles is likely to prompt some businesses to review the situation. Where the increased call rate is leading to increased business and more profits, and where a business feels it is imperative for all callers to pay nothing at all to contact them, these businesses will continue to use freephone numbers. Others, spotting this as an opportunity to steal a march on competitors still using expensive revenue share numbers for sales lines, will flock to freephone numbers with renewed vigour. A few, when faced with increased running costs, will change to 03 numbers using the simple logic that as these calls are inclusive in call plans on mobiles and landlines they are effectively "free" for many of their callers, but come with a lower cost to the business that uses them. Some people predict that freephone usage will diminish in the next few years in favour of 03 numbers. Others predict that making 080 calls free from mobiles will lead to a mini-boom in their usage.
When the call is to an 084, 087 or 09 number, it is the caller that pays the fees for the final leg of the call. This allows the user to have and run the number at little or no cost. Instead of the normal 0.1p or 0.2p/min termination fee for 01 and 02 calls that is paid by the caller's telephone company to the terminating telephone company, where an 084, 087 or 09 number is in use, the caller's telephone company pays a much higher fee, known as the "enhanced termination rate", to the company that runs the non-geographic number functionality.
This fee varies from 2p to 7p/min on 0843 and 0844 numbers. It is around 2p/min on 0845 numbers. There's currently no such fee on 0870 numbers. Ofcom propose this fee be reinstated for 0870 calls in 2015 and it is likely to be around 10p/min. The fee is up to 13p/min on 0871, 0872 and 0873 numbers. Finally, it's up to ^1.53/min on 09 numbers and Ofcom propose increasing the maximum 09 fee to ^3/min in 2015.
It is widely known that calls to 09 numbers make money for the call recipient. One of the telecom industry's dirty little secrets is that the same revenue-generating system has been in use for 084 and 087 numbers since 1996. In all cases, once the money derived from the "enhanced termination fee" has paid for the non-geographic call features and for final-leg call routing, anything remaining is paid out to the called party in a revenue share arrangement. This can be up to 4p/min on 084 numbers and up to 8p/min on 087 numbers.
Currently, the "enhanced termination fee" is hidden within the call price. Ofcom propose unbundling the various fees. Users of these numbers will have to declare this fee and it will become known as the Service Charge. Ofcom's current proposals will make this transparent. It will be clear that calls to all 084, 087 and 09 numbers carry a "premium" to the benefit of the called party.
Phone networks used by callers will have to declare how much they mark up the call cost. This fee will become known as the Access Charge. Each network will set and declare this fee once per tariff and it will cover all 084, 087 and 09 numbers. The much-hated connection fees currently charged by landline operators will be scrapped.
When a call to an 084, 087 or 09 number originates from a BT landline, BT are currently not allowed to make profit on call origination. Whatever you pay for the call is passed on in full to the non-geographic number company. This regulation will end at the same time the "unbundled tariffs" system is introduced and may lead to a small price rise for BT customers. Several landline networks have copied BT prices for many years. They are all currently raising their prices by several pence per minute.
Many users of 0845 numbers currently claim they do not benefit financially from these calls. They point to the fact they receive no revenue share to back up their claim. This ignores the fact that callers are paying the call recipient's call handling costs. They also point to BT allowing 0845 calls to fall within inclusive allowances. This ignores the facts: mobile operators charge up to 41p/min, other landline operators charge up to 10p/min, and most importantly, BT is subsidising the 2p/min Service Charge in order to make these calls inclusive. When these calls are "unbundled", BT will no longer be able to offer 0845 as inclusive calls and users will have to declare that 2p/min Service Charge.
Many users of 0843 and 0844 numbers claim these are not "premium rate" calls. They point to the fact that only 0871, 0872, 0873 and 09 numbers are covered by the Premium Rate Service (PRS) regulations. This ignores the fact that calls to 0843 and 0844 numbers incur a "premium" to the benefit of the called party. The payments mechanism for 0843 and 0844 numbers is identical to that for 0871, 0872, 0873 and 09 numbers, albeit at a rate several pence per minute lower than that for the 087 numbers.
Once 0870 returns to revenue sharing, the "unbundled tariffs" system will make it very clear that all 084, 087 and 09 numbers use the exact same scheme and that the call recipient is in some way benefitting financially from the call. Even if the Service Charge isn't high enough to generate a revenue share payment, it will be clear that the call recipient had part or all of their additional call handling costs paid for them by the caller. The call recipient will incur call charges only under very specific circumstances. These include situations where the call volume is very low and/or the call is routed to a destination such as a mobile phone or international number where the routing cost is higher than the Service Charge paid by the caller.
The forthcoming changes are very complicated, but the end result will be a much simpler system with much greater call price transparency. Users will have the choice of several number ranges:
- 03 numbers, where both the caller and the called party each pay the costs associated with their end of the call,
- 080 numbers, where the called party pays for both ends of the call and does so for all callers using landlines and mobiles, and the caller pays nothing,
- 084, 087 and 09 numbers, where as well as paying their own network to connect and convey the call, the caller pays an additional Service Charge to the benefit of the called party, and the called party generally pays nothing unless the call volume is very low or the Service Charge paid by the caller doesn't fully meet the costs incurred in handling the final leg of the call. In most cases, the called party will be making money from each call.
