London Blasts 0870 'helpline' generates revenue for Met Police!

bbb_uk

Thanks. That makes sense.

I always understand why the likes of telewest charge slightly higher than BT and it never bothered me and can even (to a degree) understand why the networks charge 4/5 times more for a NGN number as I realise that they must pay out a fortune to maintain the network (cell sites, etc) and of course the call staff.

I'm currently on o2 Online PAYG (I do have several other sims as well) and despite everyone saying their is no need for a premium rate number I have understood that this premium rate c/s number is what is subsidising the free 300text or free 100anyone, anytime mins tariffs that they do.

I do hate ringing their premium rate number (it is only natural) but I know that I do actually get something in return and that is the free text/mins, etc. Saying that I do try and email where possible first?

bunking_off

The mobile networks do blatantly profiteer on 0870 numbers, but at the end of the day they're deemed not to have significant market power on outbound calls (it's viewed that there's hot competition between the 5 networks), so ultimately you can't really get at them too much....after all they are in business to generate a profit.

It's just a shame when the profit is from a tragedy, as per this one....glad to see they seem to be doing the right thing.

Now, another area where the mobiles *do* profiteer where there is no competition is on termination rates for calls to their networks....don't get me started on that one...

bbb_uk

bunking_off wrote:

...Now, another area where the mobiles *do* profiteer where there is no competition is on termination rates for calls to their networks....don't get me started on that one...

You brought it up so can you give us a clue on the termination charges for calls to their own network?

I assume it would be calls to their own network where the mobile hasn't been ported from another network because I understand this costs more due to them having to pay the network it was originally on which then this network passes the call back again. Does that make sense?

bunking_off

bbb_uk wrote:

You brought it up so can you give us a clue on the termination charges for calls to their own network?

I assume it would be calls to their own network where the mobile hasn't been ported from another network because I understand this costs more due to them having to pay the network it was originally on which then this network passes the call back again. Does that make sense?

OK, we're off topic for this thread but still on topic for the board.

Off-hand, I'm not absolutely certain what the current charges are, but I seem to recall it's something of the order of 10ppm peak to Voda/O2, 11ppm to Orange/T-Mobile. Certainly, the average between peak/off-peak is 5.63ppm and 6.31ppm respectively. The difference between Voda and Orange is a technical thing : GSM1800 networks need more basestations than GSM900 ones. So, the first observation is that if your fixed line provider offers rates to call mobiles of less than this, they're using an arbitrage technique. See this thread for some examples : http://forums.moneysavingexpert.com/showthread.html?t=71811 .

This isn't my field, but I believe what happens when a number is ported from e.g. Orange to O2, calls flow via the Orange network, and Orange pay O2 the full termination rate....ie O2 get's slightly more than they would receive for a call directly to one of their own numbers. In the reverse direction, I guess Orange have to accept that they don't receive quite as much.

The question is whether the 10/12ppm peak is a fair reflection of costs to terminate the calls. Putting my engineer hat on but with incomplete information, I'd say intuitively it's way too much. What's more telling, however, is a comparison with retail tariffs to
(a) make an on-net call from e.g. one Voda handset to another, or
(b) for a corporate customer to have a private line from their PBX directly into the mobile network for calling their own employees' handsets.

In both cases, the rates are *considerably* lower than the termination rates I quote above. For (a), how can it cost less to originate and terminate a call than it does to terminate it? It can't. For (b), private lines are smaller than public network interconnections, so must be less efficient hence more costly.

Of course, there's no law which says that tariffs should relate to costs, and in general it's fair game to sell some products at a loss, some at a profit...the likes of Tesco and Sainsbury's routinely underprice beans, bread and petrol.

But this situation is different. In the call termination markets, the mobile networks have significant market power : if you've got a Vodafone handset the only way to terminate a call to it is via their network, and in practical terms you wouldn't choose to use Voda versus Orange based on how much it would cost for your mates to call you. As such, in absence of regulation they could set the termination rates with impunity, because the level of those rates would have little difference in the traffic levels or numbers of customers that they'd attract. Therefore, if termination rates are higher than cost and are cross-subsidising other markets (e.g. mobile-mobile rates), what you have are companies that are exploiting markets where they have dominance to leverage power in ones which are more competitive. So, if the mobile networks did cross-subsidise in this way, that would be illegal.

If you buy the argument that termination rates for mobiles are higher than cost, then defacto what is happening is that fixed line customers are subsidising the prices of outbound calls from mobile customers. Some would argue that if most people have a mobile nowadays, that's harmless....however, as a fixed line telephony provider, I'd argue that my business suffers because customers tend to use mobiles to make calls to other mobiles to cut the cost.

bbb_uk

Thanks for that. I know it was off-topic but i'm technically-minded (have to be in my job) so it made sense!

bbb_uk

UPDATE:

For those that are interested, the Government has finally agreed from now on to use 0800 numbers (free for majority of people) and a geographical number for any future casualty numbers that may be needed (but hopefully not).

For more info can be found here on the SayNoTo0870.com website.

bunking_off

Sounds like a pragmatic way forward. Simply publishing a geo number isn't a good idea because of the issues of network congestion that I mentioned earlier. However, with this arrangement most calls will use the 0800 number (because it's cheaper) so the volume of traffic direct to the 020 number shouldn't cause too many issues.