Source: http://observer.guardian.co.uk/cash/story/0,6903,1669682,00.html

Neasa MacErlean
Sunday December 18, 2005
The Observer

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Half of all those who are switching their telephone accounts away from BT are over 50, according to OneTel, the country's biggest rival to BT. And one in three is over 60. 'People in this age group tend to be a bit more savvy,' says Mike Holliday-Williams of OneTel.
But, if the Grey Matters postbag is anything to go by, they do not all feel savvy. We were recently told about a widow in the Home Counties who switched to a cheap monthly package to cover all her national and local calls only to discover that her 0870 calls were not included and were now being charged at a higher price than BT used to levy.

It looks, however, as if her problem will be largely or partially solved by December 2006. At the moment, 0870 and 0845 numbers are operated through BT, which then charges OneTel and the other suppliers a rate for calls. The numbers are set up by businesses - such as dial-up internet providers, internet banks and competition organisers - which can share part of the profit on the arrangement with BT. But while standard rates on normal calls are about 3p a minute from BT, these calls cost 7.5p a minute.

Providers openly accept that they do not try to offer good deals here. 'They are not a competitive part of our tariff,' says OneTel's Holliday-Williams. Chris Williams, head of home telephones at uSwitch.com, concurs: 'The competitive pressure isn't enough for them [providers] to push their prices down. They charge roughly the same for calling these numbers. It's never really been a hook for acquiring new customers.'

However, the regulator Ofcom has just concluded a consultation through which it plans to inject more competition. It believes that the use of these so-called 'number translation services' has 'generated high levels of consumer concern about the lack of clarity in the pricing and marketing of these services'. It is proposing changes - from December 2006 at the latest - including a possible drop in the charge level to about 3p a minute. 'That would be fantastic,' says Holliday-Williams. 'We would definitely look at being competitive across the whole piece. Ideally, we want to be making savings for customers on every single call - but that's not possible now.'

OneTel estimates that about 2 per cent of calls are made to 0870 numbers. Some people who have moved to other providers may be able to cut their bills to some extent by using the prefix 1280 before ringing an 0870 or 0845 number. The prefix gets them back on to the BT network and tariff - and the BT tariff is rather cheaper on these numbers than most of its rivals.

This example shows just how complicated the whole field is - and how quickly it is changing. Six months is a very long time in telephony. If you have a mild interest in the subject, you can probably cut your costs by seeing how the market develops and you can probably vastly improve the service you receive at the same time. While we are getting bad news stories on our fuel and council tax bills, most people should be able to get some good news on telephony and broadband.
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This is not strictly true and makes it out to be BT's fault. Whilst BT has a large market share, it is the high call prices which have enabled other players to come into the market.

Holliday-Williams of Onetel has obviously left Ms MacErlean thinking that it is BT that holds every other party (telcos and customers alike) to ransom with 0870 numbers.