sherbert wrote on Nov 26
th, 2010 at 7:48pm:
Dave, if the 0845 numbers were not included in packages, how much cheaper do you reckon they will be?
The extra burden on call providers for connecting a call to a 0845 number versus connecting to a 01/02/03/0870 number is around 1 pence per minute during the daytime.
The "wholesale" cost on call providers to connect 01/02/03/0870 calls is roughly 0.5 pence per minute and 1.5 pence per minute for 0845 calls. So the mark-up is to cover their own costs and make a return on selling calls.
sherbert wrote on Nov 26
th, 2010 at 7:48pm:
In other words, how much cheaper would my BT line rental be?
BT Retail (the bit of BT that offers services to end users) is regulated on the mark-up it can apply to 084x, 0871/2 and 09 calls, but not 01/02/03/0870 ("normal") numbers.
Think of a supermarket selling products and a simple description of the costs involved. For each product, it charges customers a retail price which consists of the amount it cost to stock the product (the wholesale price) plus a mark-up.
The mark-up on cut-price alcohol, for example, will be tiny (I'm making an assumption here, for the benefit of the analogy). Its costs for stocking it are effectively offset on the other products (which yield greater return for the retailer).
To come back to the situation with BT selling 0845 calls, it is only allowed a tiny mark-up on them, and this is by regulation. So broadly speaking, its retail price is the same as its wholesale price and thus it is forced to offset its costs elsewhere, much like supermarkets do (you might say) voluntarily with cut-price alcohol.
Other providers are allowed to price 0845 calls as they wish. Most choose to charge more for 0845 calls than normal calls, just as we would expect any retailer selling a more expensive product to do.
Some mirror BT's forced discounted retail call charges (thus offseting their costs elsewhere) and this is probably due to its market power.
What this all means (and here is the crunch) is that the
additional cost to BT for including 0845 calls is simply the wholesale connection charges (as it's bound by regulation to make only a negligible mark-up). But as others are free to do as they please, and the additional cost to them is therefore their wholesale cost plus the mark-up (i.e. their current retail price).
Additionally, it must be born in mind that where 0845 calls are offered for no extra charge, this will be likely to have the tendancy for customers to make more of them. So it will certainly be necessary for call providers that include them in packages to continually assess customers' usage and make changes to retail prices accordingly.
Perhaps this provider has done that and decided that enough is enough and that in order to maintain the prices of its packages (and thus its place in the market), it will have to forgo including 0845 calls in them.