Ofcom, mobile termination rates and the future of telephone costs

Ofcom has today published its statement on the future regulation of mobile termination rates (see statement and press release).

The effect of this regulation will be to reduce the cost of calling mobiles, essentially to the same rate as those for calling Geographic Rate landlines. There will be other effects.

•	Mobile operators will need to recover the loss of revenue from incoming calls somehow. Ofcom predicts it as being likely that the whole structure of charging for use of a mobile phone will change. A serious danger is that the impact of this will fall most heavily on the "financially disadvantaged", who are commonly part of a diminishing group of PAYG users.
•	It will be highly likely that calls to mobile phones will join calls to Geographic Rate numbers by being primarily covered by inclusive call packages for landline users. This will cause the premium rates incurred when calling "Business Rate" 084 and 087 numbers, due to the inclusion of a "Service Charge" to the benefit of the called party, to stand out more clearly.
	If public bodies, such as HMRC, DWP and NHS service providers continue benefitting from a Service Charge by using 084 numbers then they will be seen to be more expensive to call than a mobile!
•	The general restructuring of mobile charging will enable calls to 080 numbers to be made "free to caller" from mobiles without any excessive cost being imposed on those who receive them.

I am wholly in favour of this move, however the impact will need to be watched during its progressive implementation. Ofcom admits to the possibility of certain users of PAYG mobiles being priced out of the market, or having services on which they rely withdrawn.

Note: The consultation on proposals to require users of 084 numbers to declare the Service Charge that they impose on callers has been extended. Those who wish to support this proposal have until 31 March to present their responses to the consultation - Simplifying Non-Geographic Numbers.

The Co-operative Revolution - still stuck in the past!

I fully support the Co-Operative movement as reflected by its current "Revolution" campaign. It aims to give power to all through co-operative endeavour for mutual benefit, unlike the "Big Society" which offers power to those having the time, skills and other resources to replace that exercised by democratically accountable bodies.

The Co-Operative movement must however move forward with its use of telephone numbers. 0845, 0844 and 0800 numbers dominate its lists of contact points. This policy fails to reflect the fact that BT now originates only around 25% of non-business telephone calls.

The least well-off tend to use mobile telephones and therefore incur surcharges of up to 41p per minute, over the cost of a call to an ordinary (01/02/03) number, to call these expensive 08 numbers. Even landline users commonly pay high premiums to call 0845 and 0844 numbers.

There is no justification for public bodies like HMRC and DWP sticking with 0845 numbers. It is totally unacceptable for NHS GPs, NHS Direct and some hospitals and other NHS bodies to use 0845 and 0844 numbers.

In the spirit of a Revolution, now is the time for the Co-Operative movement to show that it is up to date and ready to set a lead by revising its telephone numbering policy.

This Thursday (10 March) is the deadline for responses to the Ofcom consultation on expensive telephone numbers

Back in December, Ofcom launched a consultation on proposals to deal with the "rip-offs" on expensive telephone numbers - Simplifying Non-Geographic Numbers.

People presently pay up to 41p per minute extra to call NHS Direct, HMRC, JobCentre Plus, their bank and many others by calling a 0845 number. These numbers are promoted with meaningless comments such as "local rate from BT, others may vary". It is BT that varies from the rest because it alone is currently subject to regulation of its charges (BT originates around 25% of non-business telephone calls).

Ofcom proposes that the Service Charge which recipients gain from these calls be clearly advertised as such and the Access Charge added by the telephone company be advised and charged separately.

I believe that these proposals should receive the strongest possible support. Ofcom requires responses by Thursday 10 March.

If all those who use 0845 and other expensive numbers (including GPs on 0844) and presently gain a subsidy from telephone calls were forced to declare it as being a "Service Charge", then they would have to switch their numbers or we could debate the propriety of their Service Charge properly.

NHS providers cannot levy Service Charges on patients, unless the NHS is to no longer be "free at the point of need". NHS GPs have until the end of this month to switch from 0844 to 0344 numbers, or stand in breach of their NHS contracts. If the government allows them to continue imposing (undeclared) Service Charges, then we will know where it stands!

Premium telephone charge for pensioners facing tax demands

This story - Pensioners given days to meet shock tax demands - advises that pensioners should call HMRC on 0845 3000 627 "to discuss payment options".

They pay a premium to HMRC even to call this number.

HMRC benefits from a subsidy on its phone bill from calls to this number, at the expense of callers, depending on their telephone service provider.

Whilst unique regulation on BT denies it the chance to make any money on 0845 calls (it makes its profits elsewhere) most providers add their own "Access Charge" to the HMRC "Service Charge" - see this table of call costs to various type of number.

•	Pensioners at home all day with cable TV and therefore using a Virgin Media landline would pay nothing to call a Geographic Rate (1/02/03) number, but pay a connection charge of 12.24p plus 10.22p per minute to speak to HMRC on its 0845 numbers.
•	Those who cannot afford a landline and may have to use a mobile phone could be paying up to 41p per minute to speak to HMRC.

HMRC (along with the DWP, NHS Direct and other public service providers) must immediately adopt 03 numbers.