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Ofcom Make UK Calls to 0800, 0808 and 116 Numbers Free for all Phones

Posted Thursday, December 12th, 2013 (7:37 am) by Mark Jackson (Score 1,180)
telephone-warning-uk

The communications regulator has today introduced new measures to help simplify call charges for 08, 09, 116, 118 numbers and to ensure that calls made to 0800, 0808 and 116 numbers are FREE from mobiles as well as fixed phone lines. But it won’t happen for a while.

Ofcom’s new rules also require that telephone users be able to see the cost of calling such numbers by having them broken down into an ‘Access Charge‘ to their phone company and a ‘Service Charge‘ to the company or organisation they are calling.

Telephone providers will thus be required to set the Access Charge for related numbers, which must be made clear on their bills and during the sign-up process. Meanwhile service providers (the party being contacted) will have to specify their Service Charge wherever they advertise or communicate it.

Additional Changes

* The service charge for premium rate (09) numbers will be capped to protect consumers from the risk of rogue operators imposing extremely high charges in future.

* Confusion around 0845 will be addressed. This number range – which is sometimes tied to the cost of a geographic call – will no longer work this way, and will instead function like any other 084, 087 or 09 number. That means the cost of calling 0845, broken out into an access and service charge, will become clear.

* Organisations wishing to offer a geographic-rate number will still have the option of using the 03 range. Ofcom is actively encouraging public and not-for-profit bodies to use 03 numbers. These cost no more to call than a geographic (01 or 02) number, and must be included in a customers’ inclusive minutes or discount schemes.

Ofcom’s CEO, Ed Richards, said: “These changes will be the biggest for UK telephone customers in more than a decade. We expect them to restore people’s confidence in using phone services, and to increase competition.” But we’ll have to wait 18 long months before the measures are fully implemented on 26th June 2015, which is intended to give operators ample time to prepare.

The regulator also plans to launch a national campaign to help explain the changes to UK telephone users, although it won’t reveal more about this until Spring 2014. It should also be noted that the changes announced today will apply to calls made from residential lines, although Ofcom anticipates that providers will extend the same arrangements to business customers.

UPDATE 8:17am

Ofcom has today also published a second consultation relating to its proposal to withdraw the 0500 number range. The regulator is now proposing to open a numbering sub-range which would provide a migration path for service providers currently using 0500 numbers (e.g. two alternative number sub-ranges – 080 50 and 080 85) and has issued a revised three-year timeframe for withdrawal of 0500. This consultation closes on 31st January 2014.

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18 Responses
  1. Phil

    084, 087 (0845 & 0870) still free calls within BT Unlimited inclusive (only the first 60 minutes) but Sky revert from old 0870 to 0871 (charged – cheeky sky)

  2. Ian

    It is 03 calls that are now inclusive from both landlines and from mobiles. These have been available since 2008.

    BT’s pricing for 0845 calls is an anomaly and the link with “local rate” call pricing for 0845 was lost for all callers in 2003.

    Calls to 0845 numbers incur a 2p/min Service Charge to the benefit of the called party. BT “hides” this by subsidising the Service Charge from all monthly call plan subscriptions. However, BT does not subsidise the Service Charge for calls to 0843 and 0844 numbers with a similar 2p/min Service Charge.

    Once users are required to declare this Service Charge, calls to 0845 numbers will no longer be inclusive in call packages.

    The link with “national rate” call pricing for 0870 was lost in 2003, and then partially restored in 2009.

    Calls to 0870 numbers are “inclusive” from landlines because, since 2009, there is no Service Charge. These calls are still very expensive from mobiles and that has created immense consumer confusion. Ofcom will remove that confusion by returing 0870 to revenue sharing with a Service Charge around 10p/min, as before.

    Calls to 0870 numbers will no longer be inclusive in call packages.

    These changes will see 0845 numbers working in the same way as 0843 and 0844, and will see 0870 numbers working in the same way as 0871, 0872 and 0873.

    Users will set and declare their Service Charge. This will, as now, be linked to the first six digits of the telephone number.

    Those users that want a number that is linked to the price of calling an 01 or 02 number should move to the 03 range. All 034 and 037 numbers are reserved for the user of the matching 084 or 087 number. This has been in place since 2008.

    Each phone network will set and declare a single Access Charge per tariff. This will replace the variable and often extortionate markup (especially by mobile operators) currently inflicted on callers.

    The “NTS Condition” will be lifted from BT. This means they will be able to make profit (add an Access Charge) to their price of calling 084, 087 and 09 numbers for the very first time.

    Ofcom’s proposals are only a part of the solution.

    BIS will shortly publish the The Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013.

    This requires customer service lines move from 084, 087 and 09 numbers to new 01, 02, 03 or 080 numbers by June 2014. All 034 and 037 numbers are already reserved for the user of the matching 034 or 037 number to migrate.

  3. Rupees Burdoch

    Ofcom must do more to crap down on BT’s monopolistic behaviour. It’s hurting competition and consumers.

  4. Sledgehammer

    All the more reason to use “saynoto0870″ to find a 01,02 or 03 and be charged a hell of a lot less.

  5. sheffieldowl

    I’m sure Sky will find a way round,one of the worse offenders in making you pay top rates to call them.

  6. dragoneast

    So, at the moment, my phone provider has inclusive 0845 and 0870 numbers. Simple and I understand it. I get no extra charge. Ofcon’s simplification will make sure I pay a “service charge” for what I now pay no extra charge for, and my provider won’t reduce their line rental and package charge as they don’t know how many 0845 and 0870 calls I’ll make (and neither do I). Any by the way what is this Ed Richards who tells me I’ll welcome it: some form of modern Stalin, perhaps? I suppose that’s the trouble with unsackable civil servants.

  7. Ian

    When you call an 0845 number you already pay a 2p/min Service Charge to the benefit of the called party. This charge applies whether you call from a landline or from a mobile phone.

    When you call an 0845 number using a BT landline and you have an “inclusive” call plan, BT “hides” this fee from you by paying for it from your monthly call-plan subscription. Very few other landline providers are prepared to subsidise 0845 calls in the same way. Mobile providers never subsidise the Service Charge.

    Additionally, if you call any 084 or 087 number from a BT landline and it is one where you do have to pay something for the call (because you do not have inclusive minutes, or the number is one that is not covered by your inclusive minutes allowance), be aware that the “NTS Condition” prevents BT from making any profit on call origination. Almost everything that you pay for that call is passed on to the telephone company of who you are calling. This money covers their expenses in running the non-geographic number and, if the Service Charge is high enough, also allows them to make a revenue share payment to the called party. On 0845 calls, revenue sharing is rare. At most it may be half a penny per minute. Revenue sharing is commonplace on other 084 numbers and on most 087 (except 0870) and all 09 numbers because the Service Charge is much higher.

    The “NTS Condition” (which prevents BT from making profit on call origination for 084, 087 and 09 numbers) means that BT’s call prices for 084 and 087 numbers are abnormally low compared to those of other providers. Additionally, the cost (0p/min) of calling 0845 numbers from a BT line with inclusive calls is especially low wholly due to BT cross-subsidising the Service Charge. Ofcom are removing those anomalies by exposing the Service Charge on all 084, 087 and 09 numbers and ending the “NTS Condition”.

    Businesses usually quote BT’s abnormally low call rates as if they are the norm. In fact they are exception. Consumers are misled by “calls cost X p/min from a BT line” announcements, as they could be paying up to 39p/min more (or twenty times as much) than the quoted BT figure when calling an 084 number from a mobile phone.

    Connection fees are another contention. When quoting the cost of calling these numbers from BT landlines, most users fail to mention the substantial connection fee, often around 15p per call, which means that landline callers are further misled as to the actual amount they will have to pay for the call. Ofcom are going to scrap call connection fees (on landlines) for calls 084, 087 and 09 numbers. Instead, callers will pay a minium charge equivalent to a one minute call (as already happens on calls from mobiles).

    In requiring phone operators to separately declare their Access Charge component in their price lists (instead of the total call cost) the cost of these calls from mobile phones will plumment. Ofcom are unlikely to tolerate Access Charge figures of 30p to 39p/min as currently paid by many callers. Something under 15p to 20p/min seems much more reasonable. Landline operators are likely to set their Access Charges at less than 5p/min if they are to retain levels similar to current pricing. BT currently has an Access Charge that is effectively zero. They are unlikely to change that by much, perhaps a couple of pence per minute at most.

    Less than 40% of residential landline calls originate from a BT landline. More than 55% of all calls originate from mobile phones. The proposed pricing changes cater for what the majority of callers already pay, rather than fixating on BT’s abnormally low rates. The changes also make clear how much you are paying to the business you are calling and how much your telephone company is adding on top. These details have always been hidden within the overall call price.

    Additionally, in future, it will be a simple operation to compare tariffs. The current 200-page non-geographic call price lists produced by each network will be replaced by a single Access Charge figure, one per tariff, on each network. The Access Charge will cover all 084, 087 and 09 numbers and this will enable proper consumer choice when selecting a tariff.

    These changes from Ofcom are only part of what is going on. BIS should shortly be publishing legislation to implement the Consumer Rights Directive in the UK. This requires businesses using “expensive” 084, 087 and 09 numbers for customer service lines to move to the matching 034 or 037 number or to a new 01, 02, 030, 033 or 080 number. Users of 0845 numbers can move to the matching 0345 number.

    03 numbers were introduced in 2008. These are charged at the same rate as calling an 01 or 02 number and count towards inclusive allowances from landlines and mobiles alike. There is no Service Charge.

    Businesses are encouraged to use 034 and 037 numbers because they are cheap to call from landlines and from mobiles, as opposed to 084 and 087 numbers which are only cheap from BT landlines. 084 and 087 numbers are expensive on most other landlines and very expensive from mobiles. 03 numbers are universally cheap. They never cost more than calling an 01 or 02 number and are often inclusive.

    In order to understand what you will be paying to call businesses in the future, you need to take into account the changes from Ofcom (making 084, 087 and 09 charges clearer) and from BIS (moving businesses to cheaper 03 numbers).

    Slightly higher rates for calling 0845 numbers from a BT line, and calling 0870 numbers from all landlines, will be irrelevant when the businesses you are calling has swapped to 0345 and 0370 numbers.

    • dragoneast

      Yes, I got it first time. But that’s a simplification?

      The basic problem is that suppliers can’t be forced to reduce their overall profit – so what goes down somewhere will go up somewhere else (and not necessarily by the same or less), as their only income is from the consumer. And some consumers do arrange their affairs to pay less now, and will loose out. Things in the real world don’t always turn out as “they should”, albeit a good job there of doing Ofcon’s publicity for them. Pardon me if I’m not grateful.

    • Ian

      Yes, it is a massive simplification.

      The call price will be the Access Charge retained by your telephone network plus the Service Charge paid onwards to the benefit of the business you are calling – splitting the current combined charge into its two separate components.

      By exposing the Access Charge, the levels will fall because they will be openly subject to competition. Additionally, Ofcom will be able to take direct action against excessive levels.

      By requiring users of these numbers to declare the Service Charge, many businesses will be unable to justify imposing this charge on callers and will stop using them. In any case, the Consumer Rights Directive will shortly force this change on many of them before June 2014.

    • Chris C

      I hope you right ian.

      I have been tracking these changes for some time and even took a active part in the consultation, but there is a lot of things watered down in the final changes.

      These were been reviewed since before 2012 yet even after all this time operators dont have ot change until 2015, there has been severe resistance in the industry and many delaying tactics, 18 months to prepare when all the operators already know what to change is ridicolous but its what we have. In reality during that 18 months the operators will be working out where to increase prices to compensate their profits.

      The good

      0800 free on all phones
      ofcom proactively trying to get public bodies to move to 0345.
      removing the bt cap on 0845 (very important as many media use BT’s price to display on screen making it misleading since BT is no longer tha majority of the market).

      The bad.

      the fact they consider it confusion by consumers I think is an insult, more like misleading from the media, how many times have we seen on a tv screen or advert 0845 (changed at geographical/local rates).
      I believe they going to enforce a message at start of calls detailing the service charge which only lengthens an already expensive call.
      Seperating the service charge and connection charges may cause hostility as it adds complexity, most people just want to know an overall cost.
      Not addressing the system where most charges are hidden without working to find them.
      the 18months we now have to wait for the changes.

    • Web Dude

      “On 0845 calls, revenue sharing is rare” – I thought it had been banned, along with revenue share on 0870, a while ago, which is why 0844, 0843 and 0871 became popular among some firms. BICBW.

    • Ian

      Yes, there are some concessions made in the final version. The core objectives are still met and there’s the possibility of reigning in those concessions at a later.

      Originally it was proposed that phone companies would each set a single Access Charge per tariff that covers all 084, 087 and 09 numbers equally and which can either be a pence-per-minute rate or zero. The change is that phone companies will instead be allowed to set a single rate for the Access Charge, covering most phone number ranges, and then set a rate of zero for a selected few such as 0845 and 0870. This allows BT to protect their market in selling 0845 numbers to businesses. However, the discount will be far more transparent than the present arrangment.

      One reason for the 18-month timescale is to allow time to rationalise the number of price points for the Service Charge. This requires agreement from hundreds of providers. Those are going to be very complicated discussions. The other reason is to give everyone more than enough time to modify their billing systems.

      Separating the Service Charge and Access Charge is a simplification, especially when trying to find the call price from a landline. At present, you first have to find the tariff code using the first six digits of the telephone number. This is often buried in a document that is hundreds of pages long. Once you have that tariff code, you can then look up the actual call price in another document.

      In future, your phone network will advertise a single Access Charge covering all 084, 087 and 09 numbers (may be zero for some ranges, as noted above) and whoever you are calling will advertise their Service Charge next to their telephone number. Add the two figures together to find out what you will pay for the call.

      It will become much easier to compare the various phone providers tariffs once they each have to state their Access Charge. This charge must be in a prominent location in their price lists.

      It will become clear how much the called party is financially benefitting from the call once they have to declare their Service Charge. This should be shown next to their number wherever it is advertised.

      I see no requirement to announce the call price at the start of the call.

    • Ian

      The Service Charge element of the 0870 call price was removed in 2009 and revenue sharing prohibited. Calls to 0870 numbers from landlines started to count towards inclusive allowances. Mobile operators did not drop their 0870 call price and did not make calls to 0870 numbers inclusive in call plans.

      When revenue share payments ceased on calls to 0870 numbers, many businesses simply swapped to an 0844 number and continued to receive revenue share payments.

      BT anticipated that Ofcom was about to remove the Service Charge from calls to 0845 numbers and was about to prohibit the associated revenue sharing. BT immediately made calls to 0845 and 0870 numbers inclusive in call plan allowances. A small number of other operators copied that move.

      However, upon seeing the changes to the 0870 arrangements had not had the desired effect, Ofcom did not proceed with making similar changes to 0845 numbers. In fact, they never even got as far as announcing their intentions for 0845. BT had speculated as to what Ofcom might do, and got it wrong. This left BT, and others, to pay onwards the 2p/min Service Charge on calls they were no longer charging at a per-minute rate. BT, and others, now subsidise the Service Charge on 0845 calls from all monthly call-plan subscriptions.

      In 2010, Ofcom decided to start consulting on a radical overhaul of the whole of the 084, 087 and 09 ranges. That consultation led to the “unbundled tariffs” system that will be implemented in June 2015.

      BT’s discounting of the 0845 call price for those who have an inclusive call plan is a major distortion in the market and it causes much confusion. It is not other providers rates that vary, but instead BT’s rates that vary from everyone else. The “unbundled tariffs” system will bring much needed clarity to this situation, even with the concession that phone networks will be allowed to set a zero-rate Access Charge for some number ranges.

      The 2p/min Service Charge paid by callers on calls to 0845 numbers is barely enough to cover the costs incurred by the called party’s telephone company in providing the non-geographic call-handling, the call-queueing features and the final-leg call-routing out to the called party. Organisations with very large call volumes may receive a revenue share payment, at most, around half a penny per minute. Revenue sharing on 0845 is rare, but even without it be clear that the called party financially benefits because the caller is paying most or all of the running costs of the 0845 number.

      The fact that callers are paying the called party a fee when they call an 084, 087 or 09 number will become very clear when all users of those numbers are required to declare their Service Charge.

  8. JollyRoger

    So I have to subsidise those who insist on talking for ages to a human rather than do most communications by email or other means, I don’t think they thought that out properly. 10p a minute strikes me as a reasonable charge as long as a person is not on hold for a long time.

  9. DTMark

    I don’t normally ring these premium rate numbers. If I come across them I’ll tend to send an email instead.

    Three was a perfect example, all of the non-sales numbers are premium rate – support and cancellations.

    Having had a saga with them over their network faults in our area I finally went to cancel. Ah, premium rate number. It’s broken. Why should I have to pay to cancel the broken service? I’ll email them.

    In the end five days later they call to “discuss” the cancellation and put me on hold for ten minutes at their cost. In the end, it is cancelled when I state that even if they made it free, it is still useless until it is repaired, so it is cancelled. Those were the magic words.

    I have in my tray a final bill for about £6 which I don’t need to pay as it’s dated up to the date of the call not when I instructed cancellation. I’ll give it a couple of weeks and.. send them an email.

    Then I’ll get a response five days later “this matter can be sorted out most quickly if you call us”. So I think I’ll ignore it and leave the ball in their court.

    Two can play at that proverbial game ;)

  10. Ian

    On December 13th, BIS published new legislation banning the use of 084, 087 and 09 numbers for customer service lines. The ban covers the types of line that are typically used for complaints, refunds, renewals and cancellations. It covers most businesses, large or small, including those used in the provision of passenger transport. Businesses have until 12 June 2014 to move to the matching 034 or 037 number or to a new 01, 02, 03 or 080 number.

    On December 26th, the Cabinet Office published guidance for all government departments and providers of public services. It recommends 01, 02 and 03 numbers be used as the default choice and 080 numbers be considered in specific circumstances. Where an 084 or 087 number is currently in use, an 03 number must be provided and advertised as the primary number. Secondary numbers, such as 0845, may be retained for the benefit of the small number of callers currently on a tariff with heavily discounted weekday daytime call rates (e.g. “BT Weekend”, “BT Evening and Weekend” and “O2 pay as you go”), with the situation subject to review once Ofcom’s “unbundled tariffs” system is fully in place.

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