jasonfields007 wrote on Oct 19
th, 2006 at 11:39am:
I'm not BT or Ofcom. I don't choose the prices that 0845 numbers are to call. ...
I have copied this quote from another post. The original post has been edited out, but I believe that the above sums the reason 084/087 numbers are so wrong.
Not because we don't like the fact that they are non-geographical and we can't see where the call's going. But because the statement is completely devoid of logic.
You say that you "don't choose the prices that 0845 numbers are to call." But if prices were to come down you would have less revenue, hence the reason for stopping connecting 0870 numbers. Or perhaps you know of a way of having your cake and eating it.
Therefore, I deduce that if you could choose, you would leave the charges as they are. Is this a fair evaluation of your views?
Quote:... I'm just offering a good alternative to companies that want them to save money from very high BT charges.
This statement makes it clear that your relationship is with the service provider and that the charges to their customer are of no interest. Indeed, your "lo-call" marketing spiel says it all. You cling to the pipedream that 0845 is charged at local rate.
My understanding of 0845 is as follows (for 0870 substitute "national rate" for "local rate"):
It was previously 0345 (BT) and 0645 (Mercury, now C&W). Charges were the same as a local rate call on a BT package. Other providers like yours were allowed into the market by forcing BT to pass most of call charges on to them. BT retained enough to cover its costs of connecting the call.
Algebraically, this can be represented as follows:
c = b + x
where:
c is the cost of the call
b is the amount BT retain for connecting the call across its network
x is the amount that is paid to providers such as yourself
As prices for geographical calls have fallen,
c, the price for 0845/0870 calls has not. To claim that 0845 is local rate is completely misleading as the framework for the numbers does not allow
c to equal the cost of a local call because the NGN provider requires
x.
If the originating telco were to lower the price they charge, then they would be making a loss. So the issue here is that these numbers are
anti-competitive! They are therefore premium numbers because of the revenue or micro-payment,
x, on top of the cost of transferring the call across the telephone network, which is represented by
b.
If a company wants advanced routing, call statistics and all the other things that NTS provides, then they should pay for them. That allows for competition to drive prices down, rather than forcing Joe Public to pay, on a per minute basis, a pretty much fixed price for these services.
This is my understanding having read Ofcom's consultation documents. Is this a fair explanation of how things work?