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Local Rate Dialup To Get Cheaper?

Posted: 22nd Oct, 2004 By: MarkJ
Ofcom has announced a series of proposals for Number Translation Services (NTS); specifically 0845 (local rate) and 0870 codes. One of the proposals is a "New BT price ceiling: 0845 (4 pence per minute) and 0870 (8 pence per minute);", but that’s not all:

Ofcom is consulting on measures which aim to provide certainty for businesses offering these services and clarity for consumers calling 0845 and 0870 numbers. The key proposals are:

- Removal of links between BT 0845 / 0870 tariffs and BT local / national call rates;
- New BT price ceilings: 0845 (4 pence per minute) and 0870 (8 pence per minute);
- New guidance to prevent misleading advertising of 0845 and 0870 services;
- Guidance for government departments using 0845 and 0870 numbers;
- Extended role for ICSTIS to cover some or all 0845 and 0870 services.

Dial up Internet

Internet Service Providers (ISPs) offer consumers a wide range of dial up Pay-As-You-Go (PAYG) internet services using the 0845 number range. These services provide low cost dial-up internet use for relatively light users of the internet.

ISPs are supplied by BT Retail itself and by alternative telecommunications providers, who use the difference between BT Wholesale's cost-based charges for originating and billing a call and the retail charge for a BT local call to create a margin for the ISP.

However reductions to BT's retail prices for local calls and the introduction of discount packages have created uncertainty about the margin between wholesale and retail charges and raised questions about the advantages of using 0845 to supply ISPs.

Ofcom’s proposed solution removes the link between 0845 numbers and BT’s normal local call rates; freeing both BT Retail and the alternative carriers to price their deals competitively to ISPs.

To ensure consumer protection, Ofcom has proposed price ceilings on BT for 0845 at 4 pence per minute; and for 0870 at 8 pence per minute. Within the price ceilings in the 0845 number range telecommunications carriers will be able to offer a range of bulk price deals to ISPs.

The ISPs will in turn be able to compete for customers on price as well as service features. This will sustain competitive pay-as-you-go dial-up internet services without the need for disruptive and costly number migrations.

In short, we could see 0845 services becoming more competitive with one another and an end to identical local call rate pricing. Such a move could represent a significant shake-up for an otherwise stagnated area of the market.

Never underestimate the importance people will place on even the smallest degree of savings possibilities.
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