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The following article written by Henry Newrick, Managing Director of Team Telecom (Europe) Ltd best summarises why it is NOT a good idea to get a 0870 number in view of the upcoming changes to this number range.
0870 Numbers – Facing Criticism from Almost Every Quarter
When the UK telecoms authorities first introduced non-geographic 0870 numbers back in the early 1990’s these were well received because they offered several advantages to businesses over the then prevailing geographic numbers (such as 0171, 01273, etc).
One of the chief advantages was that the numbers were portable. If a business moved – no matter where in the UK, or even overseas, it could retain the number, and point it to a new landline where the business was being relocated to. This meant that by advertising its non-geographic 0870 number (rather than a geographic number) the business would never have to change numbers again no matter how many times it moved. The savings in signage, advertising and stationery were immeasurable – not to mention the cost savings associated with not having to communicate phone number changes to a customer base that could, in some cases, run into millions. Those who stayed with a geographic number incurred considerable additional costs each time they relocated since by and large geographic numbers could not be moved away from the local exchange with which they were associated and in heavily built up areas such as London this often meant a one or two mile radius.
Another advantage of having a 0870 number meant that smaller companies operating from some regional town or village could compete with bigger competitors by giving the appearance of being much larger than they were. It enabled them to achieve a national identity whereas in reality they were essentially local. The travel industry took to 0870 numbers with a vengeance as the holiday pages of any national daily clearly showed.
In the beginning all was well. There were no consumer complaints because at 7.9p a minute the cost of making a national call was the same – whether you were calling a geographic number or a non-geographic 0870 number. Also in the beginning the contentious issue of revenue share did not exist since very few carriers gave any revenue away and if they did it was only to high volume users. In the early stages this rarely exceeded 1p minute.
However, over the ensuing years, while most costs kept going up at the rate of inflation (or more) the cost of making a phone call from landline to landline fell dramatically. Today, of course it is possible on certain rate plans to call anywhere in the UK for as little as 1p minute, and in fact often completely free of charge. How times have changed.
As the rates dropped, the telephone carriers found themselves with a lot of extra cash as a result of the increasingly larger revenue share given back by BT, and the lower delivery costs from a carrier’s switch to the party being called. Many carriers had huge blocks of 0870 numbers that were not being taken up by businesses (the potential universe of numbers being 10 million if all were allocated) so in order to encourage their take up, the telephone companies (there are hundreds of them) started giving away a greater share of the revenue that they were receiving from BT.
And this is where the problems started. Many businesses, and numerous government agencies, started to reap substantial incomes based on the volumes of traffic that their 0870 numbers were generating. In many cases this ran into tens of thousands of pounds monthly. Because of the income potential a lot of companies further increased their margins by cutting back on the number of call centre staff thereby keeping callers in a queue for what can only be described as unacceptable lengths of time – often up to an hour or more. And if the call was costing the caller 7.9p minute, that’s £4.74 per hour with the company receiving up to £1.80 of that (or possibly even £2+ if a very large volume user).
Soon word got out. People started complaining. The media got involved. A storm was created, and companies / agencies with 0870 numbers became the target of a concerted media campaign. As a result of all this a lengthy enquiry was held by Ofcom (the regulatory body) in which all interested parties were invited to make submissions. Some months ago it gave its final ruling – one that has proved contentious to say the least.
From mid 2008 there will be no more revenue sharing. Not because of any particular edict, but because by law the cost of calling a 0870 number must be no more than the cost of calling a landline number at a particular carrier’s prevailing rate. In general this means that the cost of calling a 0870 number will likely be between 1p-2p minute – which is great for the consumer but bad news for companies that hold these numbers. For not only is there not going to be any revenue sharing, but companies with 0870 numbers are going to have to PAY to receive 0870 calls – which will be a far cry from the current halcyon days.
The principal reason that companies will have to pay to receive calls is that under the new rules, BT will NOT be required to pass any revenue to the carriers and yet the carriers will still have to deliver traffic to the party being called. BT has already indicated that it will not be paying the carriers anything beyond February 1, 2008. Therefore, not only will carriers have to recover their costs for delivering traffic, but they will also need to make a profit, as will the agents/resellers that most carriers rely on to handle their sales. In so far as its own clients are concerned BT has already said that it will be charging between 3.5p-4.5p minutes depending on the level of service required.
Because of these imminent changes many companies are now making plans to migrate away from 0870 numbers to the lower priced 0844 or 0845 numbers. A few are going the other way and moving to the more expensive 0871 numbers (costing callers up to 10p minute). Given the outcry that there has been over 0870 it is hardly conducive to encouraging sales or good PR to have callers pay 10p minute on an incoming sales line. And companies that do so will likely incur further media wrath in due course. 0871 numbers will also come under the jurisdiction of ICSTIS the body charged with regulating premium rate lines. Given the bad publicity that premium rate lines have recently had then ICSTIS will no doubt be keeping an eagle eye on businesses that use 0871 numbers.
In summary therefore if you currently have a 0870 number, and don’t wish to pay a per minute charge from next year then you would be best advised to acquire an 0844 or 0845 number while good ones are still available. Each number has its advantages and disadvantages and more information on these can be found at
www.0870changes.info.
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