The SayNoTo0870 Article Discussion Area

bbb_uk

DonnyDave wrote: »

I am not aware of Ofcom setting any prices. It has, however, defined some rules.

My mistake I thought they did. Ofcom do, however, I believe have overall say on how much BT charge for calls carried on their network and that this rate is BT's standard rate hence why a lot of other providers* add a small amount on top to make a profit.


* except Virginmedia and SkyTalk who are currently the two most expensive providers of calls to 0845/0870 numbers.

bunking_off

You need to distinguish between (a) 0844/0871, (b) the situation with 0845/0870 now and (c) the situation with 0870 once it's locked down to national rate.

For (a) and (b), BT collect retail revenue, subtract their cost of conveyance plus a retail uplift, and pay the 08 number provider the remainder. The retail uplift is BT's profit, which is regulated, but regulated at a return on capital that most telcos would die for. Hence, comments above that BT make no profit on these calls is incorrect. NTS is not really my field, but from memory for 844 and 871 the number provider selects the payment they want (from a set of predefined pricepoints), and this ripples through to the retail pricing. I'm not sure how it works with 870 nowadays, but it's certainly true to say that BT don't have total freedom to retail charge as they see fit. So, the original tenet of bbb's point that BT has to make a regulated outpayment hence can't just throw these in with inclusive minutes without financially exposing themselves is true. Indeed, all telco fraud departments will be familiar with the perils of inclusive minutes such as this, because the recipients of revenue share to tend to cotton on to the money making opportunities of putting call-senders onto lines on inclusive packages and waiting for the money to roll in...

The situation with (c), ie 0870 once it falls to geo retail rate is different. This is still subject to a dispute at Ofcom, but suffice to say that all of the potential outcomes give the 08 number provider far less money from BT, hence the situation that 0870 number holders will probably have to pay to receive calls....hence the exodus to 0844.

bbb_uk

bunking_off wrote: »

comments above that BT make no profit on these calls is incorrect.

So even BT charging 2p/min peaktime they still make a profit on calls to 0845 numbers? I know BT make a profit on calls to other NGNs but I would have thought that BT paid about this amount to the TCP for calls to 0845 because I'm sure I've seen some NGN telco's offering out payments upto near this amount to their customers!

bunking_off

Wouldn't claim to know BT's retail rates inside out so don't know where the 2ppm comes from. However, the latest public info I've seen put the outpayment for 0845 at 3.27/0.95/0.87ppm for day/evening/weekend. As I understand it, this is based on BT's average retail collection rates, ie where they heavily discount for the retail customer they'll make a loss on the particular call, for customers on "standard rate" they'll make a higher profit, overall they'll make their regulated rate of return. If you read the Ofcom doc linked above, you'll see that the flashpoint between the telcos has been lack of transparency of the effect of BT's discount schemes.

bbb_uk

bunking_off wrote: »

Wouldn't claim to know BT's retail rates inside out so don't know where the 2ppm comes from. However, the latest public info I've seen put the outpayment for 0845 at 3.27/0.95/0.87ppm for day/evening/weekend.

So as BT charge 2ppm daytime for calls to 0845 they do effectively make a loss however they will recoup this loss by other means and believe they have done by the increases in geo call charges, connection fees, and other call charges.

bunking_off

The change to retail rates will have triggered a change to the outpayment, so the numbers I quoted above will have fallen. The principle is that BT will make a regulated rate of return (ISTR 15% but don't treat that as gospel) for calls to a given number range. As such, they'll be making a profit on 0845 overall...there certainly won't be any cross-subsidies between that and geo prices etc.

bbb_uk

bunking_off wrote: »

...As such, they'll be making a profit on 0845 overall...

If BT are making a profit on 0845 even though they charge 2ppm (daytime) then just how much profit do the likes of VirginMedia and SkyTalk make charging 6p/min (daytime)? A lot I believe!

CAHA

I really must work harder at trying to understand this. I have tried to read the latest proposals from OFCOM but I just can't fathom out what they are trying to do. I thought the plan was to make companies be more transparent and publish standard phone numbers as an alternative. Have I got it wrong...?

Latest OFCOM proposal can be found here:

http://www.ofcom.org.uk/consult/condocs/0870calls/summary/

Surfer

Even using 0800 numbers can be painful if phoned from a mobile. We do not have a landline so we try and use SAYNOTO0870 numbers as much as possible however there are not many alternatives for 0800 numbers listed and we get charged 10p per minute by our provider.

malc_b

Just had a letter today from Alliance and Leicester which show how stupid whole ofcom 0870 changes are. Soon we will have 0870/0845 included in our free minutes or flat rate monthly fee. BUT, there will be no one to call!

All business will move to 0844/0871 so they can keep ripping off their customers.