Ofcom has today launched a short consultation on changes to the National Numbering Plan and the PRS condition to allow BT to increase the rates it charges for calls to 0844/3 0871/2/3 and 09 numbers to reflect the VAT rate increase on 4 January 2011. Responses are required by 19 November 2010.

This is essentially a temporary measure because the forthcoming consultation to address regulation of Non-Geographic Call Services is likely to lift the restrictions on BT altogether, to be replaced by comprehensive regulations. These proposals simply make a slight adjustment to the legacy regulations on BT.

These changes have to be in place for 4 January 2011 so that BT can reflect the VAT increase in retail charges. Because BT cannot make money on these calls, the alternative would be to totally reorganise the whole network of termination fees. This has to be addressed one way or the other, ahead of whatever changes will emerge from the broader revision to NGCS regulation, which will have to be implemented over a lengthy period. Even the consultation on the initial outline proposals will have to run past 4 January.


What Ofcom has to do for BT to be able to reflect the change in VAT is itself tricky, but I see the main issue as being the effects of the 2½% price increases to these types of calls.

The rates for these calls have always been expressed as VAT inclusive in precise pence. The particular relevance is for PRS numbers, where Phonepay Plus rules require users to provide a price declaration whenever the number is given. In general, this requirement is met by quoting the BT (i.e. minimum) rate. The BT rates will cease to be precise numbers of pence per minute, as there is no intention to adjust the termination rates paid.

Is it hard to contemplate a statement such as "Calls cost 66.383p per minute, calls from mobiles and other networks may cost more"? (This is where the figure is currently 65p.) There has however been no parallel announcement from Phonepay Plus regarding any changes to its rules!


A lot of the consultation document is about the efforts needed to maintain the general status quo pro tem, whilst bigger and more radical changes are afoot.

One problem created by the way in which Ofcom defined 0871/2/3 as PRS is that it did so by reference to all calls costing more than 5p per minute (as the regulated BT rate). To avoid the highest rated 0844/3 numbers falling over this line Ofcom proposes a specific exclusion of 0844/3 from PRS, so as to avoid having to re-draw the line. Although I believe that all revenue sharing numbers should be treated in the same way as PRS (indeed that should be more tightly regulated), I would not oppose this specific proposal at this stage.

I personally see nothing sinister in this simple pragmatic measure, although I accept that some may not agree with me. Furthermore, whilst PRS continues to be handled by PhonePay Plus, there is no way that 0844/3 or 0845 could fit into the PRS regime. Better solutions are needed.

The general sweep of price changes that will come about as a result of the VAT increase will doubtless be reflected in relatively cleanly rounded rates. The BT rates for 0844/3, 0871 and 09, to thousandths of a penny, will stick out like the sore which they are - clearly calling for action.

I hope that members find these thoughts helpful.

What with calls calls being rounded up to the next whole penny (after VAT has been added and where VAT inclusive billing is in operation), this will lead to price increases greater than the VAT increase. I'm not sure to what degree this will affect prices as I've not done any calculations.

See BT call charge and duration rounding information:
http://www.bt.com/pricing/current/Gen_Notes_boo/0001_d0e219.htm#0001-d0e219