MSE News: Calls to 084, 087, 09 and 118 to be clearer, but prices vary wildly

zagfles

poppasmurf_bewdley wrote: »

Regarding calls to 0845/0844/0870. I shall continue as I have done in the past and refuse to call any of them. If a company has a business model which includes such covert means of making money, I do not want to deal with them.

Sometimes you have no choice. Look at the lost luggage link I posted above for Manchester airport... Normally of course you wouldn't even think of looking for such numbers before you book.

Ypaymore

Vodafone are taking the pee.

The first service charge of 23p a minute they announced from 1/7/15 is only going to be available for less than 6 weeks, before increaseing to 45p on 10/8/15

https://www.vodafone.co.uk/explore/costs/call-charges/index.htm

They annouced before EE and then clearly saw what EE proposed and upped it

Ypaymore

Tesco Mobile allso announced a 15p a minute service charge,but quickly removed it and replaced it with 25p a minute.

zagfles

Ypaymore wrote: »

Vodafone are taking the pee.

The first service charge of 23p a minute they announced from 1/7/15 is only going to be available for less than 6 weeks, before increaseing to 45p on 10/8/15

https://www.vodafone.co.uk/explore/costs/call-charges/index.htm

They annouced before EE and then clearly saw what EE proposed and upped it

Yes, wonder how long the "low" TT access charge of 5ppm will last?

Consumers have been totally screwed by Ofcom with this. Even the industry were arguing for telcos to be allowed to include the access charge for 08 numbers in their inclusive tariffs. They didn't want to include 09/118 numbers because of bad debt risk etc.

I can't believe there's any difference in the cost to a telco of routing etc for a call to an 08/09 number than to a 03 number. Why would there be, they're both NGNs. The only cost should be the service charge, and the cost of collection of the service charge by the telco, including provision for bad debt etc.

This is basically the same as credit cards. The consumer gets a statement at the end of the month, paying in arrears, just like a monthly phone bill. But when you pay by credit card, the bank/VISA/Mastercard take a % of the retail price which pays for handling the payment, provision for bad debt etc. You buy something for £10, the retailer would get around £9.50 - £9.90, the bank/card scheme would take a % for processing the transaction. The bank takes the bad debt risk, which is one of the reasons for taking a % not a flat amount.

So why can't 08/09/118 numbers work in the same way? We've got a model which works, ie credit card payments. The telco should be allowed to keep a %, not a flat amount, of the service charge to cover processing the payment/bad debt etc. The service charge the punter sees should include this, as it nearly always does with CC payments.

The cost of call routing etc should be the same as an 03 number and therefore be treated the same. Then the advertised service charge really would be the cost the consumer pays, above the cost (if any) of calling a normal number.

Anyone want compulsory unbundled charges in shops, so an advertised price of £10 means you pay £10.20? Some retailers do it, eg travel companies often add a 2% CC charge. But most retailers don't.

But it's far far worse with this. It's not a 2% charge that will be added to the "service charge" you see. You could phone a number advertised as 1p/min service charge, and pay an extra 45p/min charge to the phone company just for collecting the charge :eek: Because Ofcom say that the phone company can't charge more for collecting a £3.60/min charged premium rate number than do for collecting a 1p/min charged 0844 number!

Yes, it really improves clarity in pricing. In the world of Ofcom.

niftyone

I see the usual high level of mobile retail staff training applies. Member given duff info about charges in 3 store.

Ian011

High AC on low SC already exists. When you call 0845 from EE, EE charges 40p and retains 38p per minute. Likewise, Virgin Mobile charges 41p and retains 39p per minute. On 1 July 2015, EE's retention is going up to 44p and Virgin Mobile's is going down to 36p and those figures will apply to all 084, 087, 09 and 118 numbers.

Ofcom could have allowed a different Access Charge for 08 and 09 ranges, but this might have led to landline providers setting a 5p Access Charge for 084 and 087 and a 50p AC for 09 and 118. This would mean that a 5p Service Charge number costs 10p if it were an 084 or 087 number, but costs 55p if it were an 09 or 118 number. Likewise, a similar massive, perhaps larger, discrepancy for calls from mobiles. How do you explain that to consumers?

There's almost 200 providers wrapped up in the mess that is non-geographic numbers, and there was no easy answer to keep everyone happy. BT and Vodafone are dominant in this market and after 1 July they will call less of the shots than before. That can only be a good thing.

Maybe it would have been better if Bad Debt Provision had been tied to the Service Charge, but there's other complications with that, and multiple ways for BT to hold the cards over smaller providers and carriers. And that's always bad for consumers.

Ofcom will review this again in another year or so and there will be opportunity to tweak the bits that aren't working. One error made was in allowing fully inclusive 0845 and 0870 calls, as that pushes up everyone else's bills. It is perhaps no coincidence that two networks that will no longer offer inclusive 0845 or 0870 calls (TalkTalk and Phone Coop) will also have two of the lowest Access Charges.

For many people, these call charges will be irrelevant. Usage of 084 and 087 is in rapid decline as users move to 03 numbers. Now that users have to declare their Service Charge this trend is likely to continue. Most people rarely, if ever, call 084 and 087 numbers.

zagfles

Ian011 wrote: »

High AC on low SC already exists. When you call 0845 from EE, EE charges 40p and retains 38p per minute. Likewise, Virgin Mobile charges 41p and retains 39p per minute. On 1 July 2015, EE's retention is going up to 44p and Virgin Mobile's is going down to 36p and those figures will apply to all 084, 087, 09 and 118 numbers.

Just checked the one we use, Vodafone PAYG.

Charges to 0845/0870 currently 14p/min,
0843/0844/0871/0872 currently 25p/min.

In August will be 45p/min plus the service charge.

So about treble the cost for 0845 & 0870, about double for the others.

Thanks Ofcom.

Ofcom could have allowed a different Access Charge for 08 and 09 ranges, but this might have led to landline providers setting a 5p Access Charge for 084 and 087 and a 50p AC for 09 and 118. This would mean that a 5p Service Charge number costs 10p if it were an 084 or 087 number, but costs 55p if it were an 09 or 118 number. Likewise, a similar massive, perhaps larger, discrepancy for calls from mobiles. How do you explain that to consumers?

You include the so called "access charge" in the service charge, like I described above. You know, like virtually every other retail cost is. Do Ofcom really think consumers care what part of the charge goes to their telco and what part goes to the service provider? Any more than the care what part of their credit card payment goes to the bank and what part to the retailer?

There's almost 200 providers wrapped up in the mess that is non-geographic numbers, and there was no easy answer to keep everyone happy. BT and Vodafone are dominant in this market and after 1 July they will call less of the shots than before. That can only be a good thing.

Maybe it would have been better if Bad Debt Provision had been tied to the Service Charge, but there's other complications with that, and multiple ways for BT to hold the cards over smaller providers and carriers. And that's always bad for consumers.

So better to allow 45p/min "access charge" for a 1p/min "service charge" call. Brilliant.

Ofcom will review this again in another year or so and there will be opportunity to tweak the bits that aren't working. One error made was in allowing fully inclusive 0845 and 0870 calls, as that pushes up everyone else's bills.

So by that logic my bill will pushed down now that I no longer get inclusive 0845/0870. Let's see, no sign yet.

It is perhaps no coincidence that two networks that will no longer offer inclusive 0845 or 0870 calls (TalkTalk and Phone Coop) will also have two of the lowest Access Charges.

For how long, now that other telcos seem to jumped on the bandwagon of screwing consumers with high access charges?

For many people, these call charges will be irrelevant. Usage of 084 and 087 is in rapid decline as users move to 03 numbers. Now that users have to declare their Service Charge this trend is likely to continue. Most people rarely, if ever, call 084 and 087 numbers.

Did you see the list I posted earlier??

It could encourage them, now that all telcos have a vested interest in getting these numbers used as much as possible. They'll be able to advertise them to companies -

"get an 0844 number which you can advertise to your customers as 1p/min service charge plus access charge". The 1p/min will be all that sticks. The access charge sounds like a nominal add on. No need to tell them it could be 45p/min.

It's Ryanair pricing - before they were forced to clean up their act. Low headline prices, but loads of hidden extras eg payment charges. Except far, far worse. At least Ryanair's card fees weren't 45 times the cost of the flight.

victor2

zagfles wrote: »

"get an 0844 number which you can advertise to your customers as 1p/min service charge plus access charge". The 1p/min will be all that sticks. The access charge sounds like a nominal add on. No need to tell them it could be 45p/min.

It's Ryanair pricing - before they were forced to clean up their act. Low headline prices, but loads of hidden extras eg payment charges. Except far, far worse. At least Ryanair's card fees weren't 45 times the cost of the flight.

If OFGEM's "simplification" of energy tariffs is anything to go by, we can't expect OFCOM to do anything to clean this mess up. It's probably the same group of people meeting in their club for lunch pondering over how they can attempt to justify their existence by making legislation that fools the public into believing they're getting a better deal. The people in the real world businesses will always out-think them. The office cleaners will out-think them. Apologies, I've insulted many hard working cleaners there.

Ian011

You do understand that it is BT Business and Vodafone Business (previously Cable & Wireless) that are dominant in the supply of, in particular, 0845 and 0870 numbers to businesses? Most calls made to 0845 numbers terminate on their networks and they earn revenue from the termination rates paid on incoming calls when those calls are made from other networks. That means they earn money on at least 80% of incoming calls and can use this to offset the cost of discounting calls to these numbers when made by their own retail customers. Additionally, BT is uniquely regulated to make zero margin on call origination to these numbers, though that regulation ends on 1 July 2015.

When selling 0845 numbers to businesses, BT and Vodafone use their own retail rates as the proof that these are cheap numbers to call without mentioning that the high termination rates for these numbers means that other landline and mobile networks cannot offer these calls cheap. If those other networks attempt to do so, they have to spread the termination charges across all of their customers thereby pushing up all of their bills.

This is where consumers on these other networks, particularly mobile networks, have really lost out for the last decade or more, having to call an expensive number that the called party insists is cheap. Call costs had to be unbundled in order to expose this additional cost added to the call price. In doing so it has already led to a massive reduction in the use of these numbers. By continuing to offer inclusive calls to 0845 and 0870 numbers, BT hopes it can continue with this deception. Vodafone have clearly decided not to do so.

The whole point of unbundling is to make businesses aware that when they use an 03 number the caller pays only their landline or mobile provider for the call but when they use an 084, 087, 09 or 118 number the caller is paying their landline or mobile provider for the call plus an additional fee to the benefit of the called party and their telecoms provider. Many users of 084 numbers would currently deny that is the case. Once they understand that point, by having to declare the Service Charge, their usual reaction is to move to an 03 number.

Doc_N

Difficult to escape the conclusion that this is yet another mess created by Ofcom, which has proved yet again that it's not fit for purpose.