gdh82 wrote on May 12^th, 2006 at 6:04pm:
You are pretty much right in what you have worked.  How much each get is pretty much unknown but in this example, AOL, wouldn't really get that much it is likely to be the provider of the 0870 (BT) that would get most of the revenue, the remainder which can vary depending on how many calls they get, etc, is passed on to the company using the 0870 (Currys) which going by adverts is generally between 2ppm to 4ppm (only really, really high volume calls would generate a return of 4ppm).

Basically, most of the revenue goes between the supplier of the 0870 (BT) and Currys.  The remainder of what little is left is used by BT to carry the call from AOL to themselves, and of course, little goes to AOL.  Does that make sense?

I have seen in some ads, that you can get in excess of 4p per minute from 0870 numbers.  These usually require a monthly rental, of about £10 which in a large call centre would be a drop in the ocean.

The telco of the terminating operator usually gets around 6p per minute, and pays their customer what it sees fit.  If it provides lots of free telecoms equipment, or deals with the admin of a low user account etc, then it probably passes on either nothing, or about 1-2p per minute.  As with most calls, getting diverted to a normal geo number, they would then pay money back to BT, or the supplier of the geo number of approx 0.25p per minute.

When you pay your BT, or other provider, the 7.5p is subject to VAT, so only 6.5p is paid to BT.

If the call is being carried by a 3rd party provider via BT's network, then about 0.25p goes to BT in their capacity of the wholesale provider, with the other provider keeping about 0.25p as profit.  If this is BT, then they would keep 0.5p.

Most 3rd party providers have to pay BT about 0.25p per minute anyway to route geographical calls, and then a further 0.25p per minute to BT (or maybe NTL, Telewest, or a VOIP provider) as the terminating operator of the person you're calling.

BT have always stated that they only make enough to route the call from 0870, and that may well be true.  However BT is a supplier of 0870 numbers and makes alot of money that way instead.

Also, if you're calling from a mobile, then the mobile company would either pay the 6p per minute to the terminating telco, and make a bit profit on it.

And any 3rd party suppliers charging more than BT for 0870 through the BT line would also make this profit.

These figures are for daytime rates.  A whole new lower set of rates for terminating, and routing calls to geo numbers and 0870 numbers apply.  The terminating telco receives less money, but rarely passes this back to the person receiving the calls.

And don't forget, we pay VAT on our phone bill so a mobile company for instance charging 10p per minute for 0870 when mobile inclusive minutes could be used for geo numbers, that 10p is inclusive of VAT.  The rate before VAT is around 8.5p, so their markup would be 2.5p.

Therefore as you may well have noticed, it is the mobile networks that have a more vested interest of keeping 0870 going.

gdh82 wrote on May 14^th, 2006 at 7:48pm:



I think Capita receive their phone numbers from Cable and Wireless.

Most providers such as C&W sell their 0870 numbers to either the BBC, or other large telecom companies to resell again to customers.  This all comes from the approx 6p per minute.

C&W probably own the geo numbers that the 0870 is pointed to as well.

C&W only administer the 0870 numbers and probably pass almost all the profit (perhaps only retaining about 0.25p) to Capita.

Capita then buy the telecoms equipment, and give it free to the BBC, and pocket the profits from the 0870 call!!

On the subject of mobiles, the terminating provider would have an access agreement with BT, and mobile networks to pay 6p per minute (I'm guessing at this figure of course but it is probably quite close) for every minute someone calls from their network.  BT only pass on that cost, a small cut and of course VAT but mobile companies and other landline providers can charge more, and they keep that profit.

Although BT as they say don't profit from 0870 calls, they do gain some advantage.

Let's say a customer on option 3 makes a 30 minute call to an 0870 number.  BT keep that small cost of forwarding the call, and out of the 6p, the terminating provider has to pay BT a very small amount again, to forward the call onto their network again.

If that same customer uses this site, and finds a geo number, that 30 minute call on option 3 is free to the caller, but BT lose out on the forwarding costs, and if the number is terminated on C&W, or NTL etc, then BT have to pay the termination costs.

Therefore BT do have a vested interest in keeping 0870, but nowhere near as much as mobile companies, or indeed the terminating telcos (which includes BT)

Thanks again Shiggaddi, not least for helping me out with Capita/Cable and Wireless distinction.  The more I find out, the more complicated it becomes!  I think I've learnt more than I can handle for one thread so I'm going to have a lie down to let it all sink in 

Seriously, though, thanks for helping me get my head around some of this stuff!  It's appreciated.

Quote:


I'm not sure if you misunderstood NGM but the "joke" was supposed to be at my expense and I was referring to the NTS process, originating providers, terminating providers, variable revenue share, features/equipment in lieu of revenue share, "middle-men" companies between organisations and telcos,   3rd party carriers paying the wholesale provider - I genuinely find this all abit complicated !  My questions were genuine and I honestly appreciated the responses, especially the trouble taken by Shaggaddi in reply.  So, you see, my lack of understanding was not concerning the deceitful nature of some organisations at all.

As much as I respect the majority of your contributions to this forum, NGM, your question above is not one of them.  I'm not one for flaming posts either but your question is irrelevant and it certainly isn't your place to post it !   

I hope, NGM, you can accept this  and we can get back on-topic ...

Dave wrote on May 15^th, 2006 at 10:10pm:


Millions of people a day who call 0870 numbers instead of the underlying geographic phone number or people like my sister who is fearful of changing gas or electricity supplier wrongly imagining that it will be less reliable than good old British Gas and SeeBoard at £150 a year more than she needs to pay.

People often pay more than they need to based on ignorance and fear of the unknown, although I agree it is highly unlikely that any of the four major uk mobile networks suffers from this kind of information deficit problem in their mobile phone call pricing and call supply costs with their underlying fixed line telecoms suppliers.