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July 2007
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0870 Numbers - Socially Unacceptable and
Companies Soon Liable to Pay for Inbound
Calls |
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When the UK telecoms
authorities first introduced
non-geographic 0870 numbers back in the
early 1990’s these were well received
because they offered several advantages
to businesses over the prevailing
geographic numbers (such as 020, 01273,
etc).
One of the chief
advantages was that the numbers were
portable. If a business moved – no
matter where in the UK, or even
overseas, it could retain the number,
and point it to a new landline where the
business was being relocated to. This
meant that by advertising its
non-geographic 0870 number (rather than
a geographic number) it would never have
to change numbers again no matter how
many times it moved. The savings in
signage, advertising and stationery were
immeasurable – not to mention the cost
savings associated with not having to
communicate phone number changes to a
customer base that could, in some cases,
run into millions. Those who stayed with
a geographic number incurred
considerable additional costs each time
they moved since by and large geographic
numbers could not be moved away from the
local exchange with which they were
associated and in heavily built up areas
such as London this often meant a one or
two mile radius.
Another advantage of
having a 0870 number meant that smaller
companies operating from some regional
town or village could compete with
bigger competitors by giving the
appearance of being much larger than
they were. It enabled them to achieve a
national identity whereas in reality
they were essentially local. The travel
industry took to 0870 numbers with a
vengeance as the holiday pages of any
national daily clearly showed.
In the beginning all was
well. There were no consumer complaints
because at 7.95p a minute the cost of
making a national call was the same –
whether you were calling a geographic
number or a non-geographic 0870 number.
Also in the beginning the contentious
issue of revenue share did not exist
since very few carriers gave any revenue
away and if they did it was only to high
volume users. In the early stages it
rarely exceeded 1p minute.
However, over the ensuing
years, while most costs kept going up at
the rate of inflation (or more) the cost
of making a phone call from landline to
landline fell dramatically. Today, of
course it is possible on certain rate
plans to call anywhere in the UK for as
little as 1p minute, and in fact often
completely free of charge. How times
have changed.
As the rates dropped the
telephone carriers found themselves with
a lot of extra cash as a result of the
increasingly larger revenue share given
back by BT, and the lower delivery costs
from a carrier’s switch to the party
being called. Many carriers had huge
blocks of 0870 numbers that were not
being taken up by businesses (the
potential universe of numbers being 10
million if all were allocated) so in
order to encourage their take up the
telephone companies (there are hundreds
of them) started giving away a greater
share of the revenue that they were
receiving from BT.
And this is where the
problems started. Many companies, and
numerous government agencies started to
reap substantial incomes based on the
volumes of traffic that their 0870
numbers were generating. In many cases
this ran into tens of thousands of
pounds monthly. Because of the income
potential a lot of companies further
increased their margins by cutting back
on the number of call centre staff
thereby keeping callers in a queue for
what can only be described as
unacceptable lengths of time – often up
to an hour or more. And if the call was
costing the caller 7.95p minute, that’s
£4.77 per hour with the company
receiving up to £1.80 of that (or
possibly even £2+ if a very large volume
user).
Soon word got out. People
started complaining. The media got
involved. A storm was created, and
companies / agencies with 0870 numbers
became the target of a concerted media
campaign. As a result of all this a
lengthy enquiry was held by Ofcom (the
regulatory body) in which all interested
parties were invited to make
submissions. Some months ago it gave
its final ruling.
From January 2008 there
will be no more revenue sharing. Not
because of any particular edict, but
because by law the cost of calling a
0870 number must be no more than the
cost of calling a landline number at a
particular carrier’s prevailing rate. In
general this means that the cost of
calling a 0870 number will likely be
between 1p-2p minute – which is great
for the consumer but bad news for
companies that hold these numbers. For
not only is there not going to be any
revenue sharing, but companies with 0870
numbers are in all likelihood going to
have to PAY to receive 0870 calls –
which will be a far cry from the current
halcyon days.
The principal reason that
companies will have to pay to receive
calls is that under the new rules, BT
will NOT be required to pass any revenue
share to the carriers and yet the
carriers will still have a
responsibility to deliver traffic to the
party being called. BT has already
indicated that it will not be paying the
carriers anything beyond January 31,
2008. Therefore, not only will carriers
have to recover their costs for
delivering traffic, but they will also
need to make a profit, as will the
agents/resellers that most carriers rely
on to handle their sales.
Because of these imminent
changes many companies are now making
plans to migrate away from 0870 numbers
to the lower cost to caller 0844 or 0845
numbers. A few are going the other way
and moving to the more expensive 0871
numbers (costing callers up to 10p
minute). Given the outcry that there has
been over 0870 it is hardly conducive to
encouraging sales or good PR to force
callers to pay 10p minute on an incoming
sales line. And companies that do so
will likely incur further media wrath in
due course. It is also fairly certain
that 0871 numbers will come under the
jurisdiction of ICSTIS the body charged
with regulating premium rate lines. And
given the bad publicity that premium
rate lines have recently had then ICSTIS
will no doubt be keeping an eagle eye on
businesses that use 0871 numbers.
In summary therefore if you currently
have a 0870 number, and don’t wish to
pay a per minute charge from next year
then you would be best advised to
acquire an 0844 or 0845 number while
good ones are still available. Each
number has its advantages and
disadvantages and more information on
these can be found at
www.telecomsolutions.co.uk
where there is also a chart showing the
comparative costs of each number from a
variety of carriers and resellers –
ranging from BT downwards.
End
Henry Newrick, author of this article is
the former editor/publisher of Business
Ideas a marketing newsletter that in
pre-internet days grew to thousands of
subscribers in over 40 countries. In
addition to writing on marketing matters
he also currently heads Team Telecom
(Europe) Ltd whose principal websites
are
www.0845-0870.com and
www.promofax.co.uk. His
email address is
henry.newrick@telecomsolutions.co.uk
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