Annex A - How NTS calls work

In this section, we explain the difference between an ordinary phone call and an NTS call.

Ordinary phone calls are calls using geographic numbers starting with 01 and 02. When you make a call to someone else you use a traditional phone service. Whether you use your normal landline at home or your mobile phone, your call travels over the public network.

However, this may involve more than one telecommunications provider carrying your call. For example, if you're a BT customer and the person you're calling is with a cable phone company, both providers will carry the call. In this case, the call starts with BT (so they're the 'originating provider' or the 'call originator') and it ends with the cable company (the 'terminating provider' or 'call terminator').

Although you'll pay BT for your call, BT will then pass on a share of that charge to the cable company because they also carried the call for part of the way. BT will then keep the rest of the charge, which will include BT's profit for providing you with the service. This person-to-person call is known as a 'geographic' call because it was made to a specific location (for example, the home phone of the person you called).

Most NTS calls begin with 08 or 09, and usually offer information and entertainment services, and pay-as-you-go internet access.

This means that, if you're dialling 0845 or 0870, you know the price as each number has its own fixed cost. However, there is a range of prices for calls to 0844 and 0871 numbers, up to a maximum of 5p and 10p a minute, or 5p and 10p a call. The most expensive NTS calls are to premium-rate 09 numbers. They can cost up to £1.50 a minute from the BT network, and include TV vote lines, competitions, adult services, chat lines, mobile phone ring-tone downloads and interactive TV games.

But these prices only apply to BT customers. Use your mobile phone, for example, and your provider can charge what they like. They must, of course, publish their price list so you know what you're paying but, when it comes to NTS calls, that information isn't always easy to find.

Unlike geographic calls, the profits are divided differently between the phone companies when it comes to NTS calls. This means that if you make an NTS call from your BT phone, BT (the 'originating provider') can only keep enough of what you pay to cover its costs. BT doesn't make any profit, and instead hands over the rest to the 'terminating provider' - the provider who receives the call. This is how the terminating provider makes a profit on NTS calls. The NTS service you ring may be provided by the terminating provider itself, or by another company - an 'NTS service provider' - who may not have a phone network of their own.

NTS calls are also different from geographic calls because they have no 'home' or specific location. In fact, if you call the customer services department of a large company at a busy time, your call could be sent wherever they're able to handle it - one of their call centres in the UK or, for that matter, anywhere in the world.

Since the originating provider (BT in our example) cannot keep any of the profit, there aren't usually any discounts on the cost of NTS calls. However, more and more originating providers offer attractive call packages that include cheap geographic inland and international calls. When you compare them, NTS numbers can start to look costly.

The terminating provider can use the profit from NTS calls to pay for the costs of routing the calls to the service provider. Some of this profit also pays for some, or even all, of the service itself. Many important services are financed this way, and couldn't exist without it. Dial-up, pay-as-you-go internet access is just one example. Here you don't pay a monthly fee, and the whole service is paid for by everyone's phone call charges. But if NTS service providers didn't get a share of the call prices, there probably wouldn't be such a wide range of services available over the phone.

Question 1: Do you agree with our proposal that revenue sharing should no longer be allowed on 0870 calls if the link between 0870 call prices and prices for 01 and 02 geographic calls is restored?