Ofcom's Strategic Review of Non Geographic Numbers

- Businesses choose 0844

Introduction

Ofcom's Strategic review of Non Geographic numbers in 2006, although not yet implemented, has already had a significant impact on non geographic numbers including a greatly increased use of 0844 numbers.

The review provided a detailed analysis of the non geographic number market, including; background, history, usage and applications, charging, issues and public concerns. Following the analysis, a comprehensive list of recommendations were made regarding 0870 and 0871 numbers, with a further assessment of the 0845 range to take place in approximately 2 years. The report announced that 0844 numbers would remain unchanged.

The following document explains the background to the Ofcom review, provides a summary of the changes and the impact of those changes, both for the service affected and the increased take up of 0844 services.

• 0870 numbers
• 0871 numbers
• 0845 numbers
• 0844 numbers

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0870 numbers

Background

During the last 20 years, the use of 0870 non geographic numbers has become widespread. A feature rich service, 0870 NGN offers many benefits such as; Intelligent routing, call statistics and disaster recovery. In addition, an out-payment, or rebate has been payable for all calls received.

Many companies using 0870 numbers have taken advantage of the revenue sharing payments to fund improvements to their customer service operation, either in terms of providing extra call centre staff, interactive voice recognition (IVR) computer systems or funding free services that would otherwise be chargeable to clients. In addition, these payments can offset some of the increased processing costs of customer interaction via the telephone rather than the internet.

At launch, the 0870 service was aligned with the national call charges (Call charge of around 8p per minute), but with the additional service benefits. Whilst this was initially accurate, during the last 10 years or so, call rates for national calls have dramatically reduced. Charges for calls to 0870 numbers have remained static. The difference in cost between a standard, national rate call and a call to an 0870 number have allowed the network providers to pay a call rebate, or out-payment, to their customers for calls received.

The growth and spread of usage of these non geographic numbers in recent years however, has generated high levels of consumer concern about the lack of clarity in the pricing and marketing of these services.

As a result of consumer pressure and parliamentary lobby, the UK communications regulator, Ofcom, carried out a Strategic review of these services. In the summer of 2006 Ofcom announced the results of the review.

New Ofcom regulations

To address the issues surrounding the charging for 0870 calls, Ofcom will implement several measures to restore consumer confidence. These include: Bringing call charges in line with the cost of a standard national rate call (i.e.: calls to 01/02 numbers). Calls to 0870 are routed over the IN network which offers additional network functionality but at a greater cost than standard calls. This means that the network providers will raise charges for 0870 calls received to cover the additional cost, much as 0800 calls are charged at present. Any revenue sharing or rebates will cease.

In summary:

• Call charges to 0870 will be reduced to that of a standard national rate call.
• Charges will be introduced to receive calls on 0870 (as for 0800)
• All revenue sharing, or rebates, to cease.

Impact on 0870 numbers

A large number of the businesses affected have already implemented a migration plan. Most have stopped advertising their 0870 number and have moved to another non geographic range - 0844 is proving to be particularly popular. The two services are then run in parallel for a period of time allowing the public to migrate to the new number but also ensuring that no calls are lost.

0844 numbers (usually charged at 5p per minute) are attractive to organisations for a number of reasons: Out payments or rebates are available (up to 2.6ppm from ITC), 0844 has a positive marketing image (it is not associated with premium rate or high cost services) and the charge to callers is comparable to that of a national rate call.

The implementation date for these recommendations was initially the 31st of January 2008. Following an appeal to Ofcom in October 2007 however, a recent announcement stated that implementation has been delayed until 'Spring 2008'.

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0871 numbers

Background

0871 numbers have been available since around the year 2000, but there was limited take up prior to 2006. 0870 numbers were much more popular as they were far better recognised by the public and offered a similar rebate or out-payment.

Ofcom's strategic review in 2006 announced a number of changes to both 0870 and 0871 services. The most extensive and immediate changes applied to 0870 numbers, with recommendations that 0871 was to be regulated by PhonepayPlus (formerly ICSTIS) at a later date. Ofcom stated that it had two objectives in extending premium rate services regulation to the 0871 number range:

• To increase the level of consumer protection for calls to these numbers
• To improve pricing transparency for 0871 calls

It was initially thought that a 'light' version of premium rate regulation would apply.

Migration to 0871 was at this time an attractive option to many organisations using 0870 who wished to retain a rebate or revenue share. Calls are usually charged at 10p per minute with a rebate or out-payment of up to 6p per minute.

A further statement concerning the future of 0871 numbers was made in spring 2007. Ofcom announced that 0871 services would be subject to the same level of regulation as other premium rate numbers (09xx). This regulation was to come into effect on 1st April 2008, but this too has subsequently been delayed.

New Premium Rate Regulations

Premium rate regulation on 0871 services includes a wide ranging set of measures, including:

• 0871 will be reclassified as a premium rate service.
• 0871 services will be regulated by PhonepayPlus (Formerly ICSTIS) the Premium Rate regulator
• All existing and new 0871 customers will be subject to the same due diligence requirements applied to 09XX premium rate customers.
• The 0871 due diligence requirements will include credit checks and the collection of Directors names and contact details.
• 0871 Revenue share payments must be withheld for at least 30 days after the 0871 calls are made.
• 0871 calls costing over 50p per call must either be accompanied by clear pricing messages in advertising, or provide a message at the start of the call stating the call charge.
• If there is a likelihood that callers will not have seen advertising showing the call costs, a clear announcement of pricing must be given at the start of the 0871 call.
• Pricing communication in advertising must be clear and not require close examination and IVR messages must be clearly audible
• Pricing communication must also be on all forms of communication that promote the 0871 number, including fleet vehicles.
• Further regulation will apply for 0871 numbers advertised on TV for calls costing above £2. (Therefore this will be unlikely to apply for most organisations).
• Customers must check directly with PhonepayPlus to gain confirmation as to whether they need prior permission before connecting their 0871 number.
• 0871 customers requiring prior PhonepayPlus approval will be required to complete registration forms and pay a fee of £300 plus VAT to PhonepayPlus. It then takes between four and six weeks for approval to establish the 0871 service.
• Service answer times must not be unreasonably prolonged or delayed.
• Poor customer service complaints are to be redirected to the service provider. The expectation is that the complaints are dealt with within 30 days and refunds provided.
• PhonepayPlus may investigate organisations if they believe that profiteering is occurring and can impose fines of up to £250,000.
• There will be a levy raised by PhonepayPlus to fund the regulation of 0871. The levy will be 0.34% of the 60% revenue share per provider.

Impact on 0871 numbers

The decision to implement full premium rate regulation has had a significant impact on 0871 numbers and take up has been greatly reduced. Many organisations that had moved to 0871 are now considering alternative numbering options.

Again, 0844 is proving to be very popular. Once implemented, the two services can then be run in parallel for a period of time allowing callers to get used to the new number but also ensuring that no calls are lost.

0844 numbers (usually charged at 5p per minute) are popular for a number of reasons: Rebates or out-payments are available (up to 2.6ppm from ITC), 0844 has a positive marketing image (it is not associated with premium rate or high cost services) and the charge to callers is comparable to that of a national rate call.

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0845 numbers

Background

0845 numbers were launched around 20 years ago and remain the most popular Non Geographic number range. 0845 numbers have many benefits: They are instantly recognisable, they have a positive marketing message, offer low call costs and are well regarded by the public.

Ofcom Review

Ofcom's strategic review stated that no immediate changes would be made to 0845 services, but that they would be a further review in 2 years time. Currently 0845 numbers are widely used to provide dial-up, pay as you go internet access. Ofcom's review will assess how much these services are used in 2 years time and the likely impact of any changes to the service.

Whilst Ofcoms priority in the review was to make immediate changes to 0870 and 0871 services, they also stated that the removal of revenue sharing or out-payments on 0845 services may be a consideration of a future review of 0845 services. The impact of such a change would mean that the network providers will charge for calls received to 0845 numbers (As is currently the case for 0800).

Impact on 0845 numbers

This statement has led to a certain amount of unease within the wider business community over the continued and future usage of 0845 services. A number of network service providers, such as Cable and Wireless are now recommending 0844 numbers to new customers rather than 0845 numbers:

The current uncertainty about the long term future of 0845 services has had a significant impact on new take-up of the service. Many organisations are now considering alternative number options such as 0844.

0844 numbers, which are similar to 0845 in most respects, are attractive to organisations for a number of reasons: Rebates, or out-payments continue to be available (up to 2.6ppm from ITC), 0844 has a positive marketing image (it is not associated with premium rate or high cost services) and the charge to callers is comparable to that of a national rate call.

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0844 numbers

0844 numbers were introduced by Ofcom relatively recently. 0844 offers a flexible service, allowing you to set a call charge of either; 2p, 3p, 4p or 5p per minute. The 5p per minute call charge rate has, to date, been the most popular option.

A generous revenue sharing option is available from ITC. The level of rebate is dependent on the call charge set and call volumes. As such, 0844 is an extremely cost effective option - encouraging your customers to call you, whilst providing a revenue stream. Many organisations, particularly those with high call volumes, have chosen to move from 0870, 0871 or 0845 to 0844 following Ofcoms strategic review.

Benefits of 0844 Numbers

• Can create a revenue stream
• Low call charges provide an incentive for customers to call
• Increase your advertising response
• Conveys a professional image
• A caring company image when used for customer service.
• Your 0845 number is portable and will never change

Features

ITC offers a wide range of network based features for 0844 services, including:

• Free network based call recording
• Online call statistics - A wide range of statistics packages tailored to your requirements
• Disaster recovery
• IVR menus ("Press 1 for Sales, 2 for Customer Service" etc)
• Voice to email messaging
• Divert on busy or unanswered
• time of day or day of week routing plans,
• area routing
• Call whisper

Connecting 0844 Numbers from ITC

• Thousands of 0844 numbers available free of charge.
• No subscription, rental or other monthly charges if minimum call volumes are achieved.
• Gold phone numbers available, from £100.
• Getting a number is fast, easy and free. Your chosen number will be fully connected and working within 48 hours.

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Ofcom

A History of Telecommunications (UK) and Ofcom from before 1969 to 2000

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