I have now noticed that since BT & SKY are not charging for 0870 numbers that some companies are now changing their numbers over to 0844 numbers!!

Does anyone think that all phone service providers will eventually not charge for all the 08 numbers?  I am going to ask SKY as BT were the first not to charge for 0870, so as SKY have now followed their lead perhaps they should be the leaders in not charging for the rest!!!

Jennie

People are changing from 0870 to 0871/2/3 and 0844 because their providers are no longer paying out the revenue share.

This is because on 1 August Ofcom stopped BT from having to pay a revenue share on 0870 calls. From that date BT, Talk Talk and Sky stopped charging any premium on 0870 calls. (BT had previously made 0870 calls inclusive in its call plans, ahead of this change.)

Because the rate that BT is required by regulation to charge for 0845 calls is much less than what it chooses to charge for ordinary calls, it has been able to make these inclusive in its call plans also. Shortly after doing so, BT increased the charge for call plans (presumably to cover this).

From 1 October the rate BT charges for ordinary calls will overtake (by a fraction of a penny) what it has to charge for the most expensive 0844 calls. I doubt that the necessary increase to call plan charges that would be required to cover 0844 calls being included would be tolerated - but you never know. It is even possible that BT could include 0871/2/3 calls in call plans when its rates for chargeable ordinary calls overtake these. It could only hope to get away with this if its competitors keep copying what it does, and unless Ofcom stops it.

All other providers (apart from the copycats Talk Talk and Sky), notably Virgin Media and the mobile telcos, reflect their costs more directly in their charges to customers, and therefore quite naturally charge a premium for calls to revenue sharing numbers. They however have not reduced their charges for 0870 calls and are thereby simply profiteering, as many of the mobile providers do when charging quite unnecessary levels of premium for all 08xx calls.

There are no good guys and bad guys in this. Someone is paying the premium that funds the revenue share and the margin that any telco needs to make. For BT and 0845 it is now all call plan customers - not just those who call the numbers - previously it was only those who paid for ordinary calls as they made them. The cross-subsidy that is going on with Talk Talk and Sky must be even greater, because they are not forced to do it by regulation, which does ensure that BT at least covers its costs on regulated call charges.

Calls to revenue sharing numbers will always cost the telco that places the call more. Jennie, ask yourself whether cross-subsidy is a good or bad thing before asking for the premium charges on revenue sharing calls to be dropped.

There is more on this on this blog.

A bit too complex for me I am afraid!  But thanks for explainin I think I have grasped it slightly!

Jennie

Jennie wrote on Sep 4^th, 2009 at 4:43pm:

Does anyone think that all phone service providers will eventually not charge for all the 08 numbers?  I am going to ask SKY as BT were the first not to charge for 0870, so as SKY have now followed their lead perhaps they should be the leaders in not charging for the rest!!!

There's no such thing as a free lunch. The higher costs that BT, Sky, Talk Talk and others incur to make such calls inclusive must be paid for from somewhere.

Either that or the premium revenue share must be removed from such calls like has happened with 0870. That way calls can be included in packages at no extra cost to the telephone providers we make our calls with.


When BT made 0870 calls part of inclusive packages, this was, I believe, in anticipation that the revenue share would be removed (which it was). So it stood to paying out the higher rate in return for the publicity it got for making the change. Also, the number of BT subscribers with inclusive calls during the weekday daytime is a small proportion of its total subscriber base.

It is extremely unlikely that the revenue share will be removed from 0844 because it was designed to facilitate this process.

Jennie, I wish that it were simpler. I am sorry that I have not made the points clearer.

It is not easy to explain why BT charges more for a call to an ordinary number than to any revenue sharing number, all of which cost it much more. Likewise, Virgin Media still charges more for a call to a 0870 number than a 0844 number, when the recipient pays to receive the former and gets money from the latter.

It is a horrible mess, caused by a mixture of tight regulation within a limited scope, opportunistic exploitation of a free market and the need to satisfy both customers and shareholders. My attempts to understand it are doubtless incomplete as nobody seems to have a clue about what is going on. All suggestions of solutions seem to be either hopelessly misguided in that they would make the situation worse, or too radical to have any expectation of coming into effect.

P.S. Well done to Dave for trying to explain the relevant part of what I covered whilst I was drafting this.

OK thanks for explaining it to me. It is very complicated.

With SKY we get free calls 24 hrs a day on all 'NORMAL' numbers & now 0870 has been added. This includes calls to 20 different countries too & even free to the USA to a mobile phone! As my sister lives there that is handy. I used to live in Tenerife so my family could ring me there free.

There is a stipulation that the calls are no more than an hour long, but we can always gang up & redial if a call is going to be that long, which they never are!

We pay £5 a month for this 'SKYTALK' + we get Broadband too.

A Great deal!

Jennie