0870 Important Regulatory Changes

0870 – used or abused ?

For some time now organisations have been making use of income received from 0870 out-payments. These out payments are the commission that the telecoms provider pays the ‘owner' of the number when they receive an inbound call, they are usually paid on 0845, 0870 or 0871 numbers. It has been argued that out-payments have been used to fund improvements to their customer service operation or offset some of the increased processing costs of customer interaction via the telephone rather than the internet.

0870 numbers are used by prestigious organisations such as:

 Government  BBC  RSPCA  British Airways

However, the growth and spread of usage of these non-geographic numbers in recent years has generated high levels of consumer concern about the lack of clarity in the pricing and marketing of these services. Research showed that customers were often confused about how much they are charged by their mobile and land line company for calling these numbers. These concerns led to an investigation and consultation process and subsequent report by Ofcom, the results of which come into force on 1st August.

Ofcom intervention

The new Ofcom regulations are designed to help protect consumers and clear up confusion. They will have a significant impact on organisations currently

using the 0870 number range, the most noteworthy being that many organisations’ 0870 numbers are to be made into a purely geographic national rate

numbers, thereby stopping the use of out-payments.

Click to download the ofcom report:.

Understanding the 0870 regulations

Under the new rules, which come into effect in August 2009, phone networks will be made responsible for ensuring that customers know how much they will be charged for calling an 0870 number. They will not be allowed to describe the numbers as 'national rate' unless the price is in line with that for calling a 01, 02 or 03 number. Companies that do not comply with the new rules could be subject to fines.

This means the caller will pay whatever their network charges for a national rate call and no more. It will ensure that it will no longer be possible to earn a revenue share on these numbers, there may even be a charge for receiving the calls.

In summary:

Changes to come into effect from 1st August 2009.0870 ranges will be removed from the NTS revenue share regime meaning number holders will not be entitled to receive revenue share payments on the 0870 calls.Companies providing outbound calling to customers will either have to bring their 0870 call charges in line with their normal geographic rates (i.e numbers starting with 01 or 02) or alternatively give the charges they make for calling 0870 numbers the same prominence in advertising their tariffs and rates information as they do for their geographic call rates.0871/2/3 number ranges will be reclassified as premium rate numbers and be requlated by PhonePayPlus the premium rate number regulator.

What is the impact?

Whilst saving some expenditure on outbound calls to the 0870 numbers, many organisations will potentially be losing a valuable source of income:

Example 1

 Company 'A' receives 28,000 call minutes per month delivered to their 0870 telephone numbers. (150 calls a day with an average 6 minute call duration) At present they receive a monthly call rebate of 2.5p + VAT for every call minute. This amounts to an out-payment of £8,400 plus VAT per annum Under the new Ofcom regulations this 0870 out-payment will stop. The business will lose the £8,400pa out-payment revenue unless it starts using 0845, 0844 or 0871 numbers.

Example 2

 Company 'B' receives 200,000 call minutes per month delivered to their 0870 telephone numbers. (1075 calls a day with an average 6 minute call duration) At present they receive a monthly call rebate of 3.0p + VAT for every call minute. This amounts to a payment of £72,000 plus VAT per annum Under the new Ofcom regulations this 0870 out-payment will stop. The business will lose the £72,000pa out-payment revenue unless it starts using 0845, 0844 or 0871 numbers.

With this in mind what are the options?

Solutions

We are currently advising all clients using any 0870 services conduct an immediate and detailed review of their telecommunications strategy, (including their future communications needs) taking into account the options available. Only then will they be in a position to decide on the most appropriate numbering strategy for the future. However that said, some of the solutions we have implemented include:

  Migrating to 0844 numbers, charged to the caller at 5ppm thereby providing users with a revenue share albeit at a reduced rate Migrating to 0871 numbers at 10ppm. However, these are shortly to be brought under ICSTIS – the Premium Rate regulators.  Running new 0845/0844/0871 numbers in parallel with their existing 0870 numbers for a period of time. This allows time for the public time to get used to the new telephone number and ensures that no calls are lost.

If you would like further information about the forthcoming changes to 0870 numbers and assistance in assessing the best option for your business, please contact us. We will arrange to provide you with free, no obligation advice tailored to the specific needs of your business.

For more information, please contact Andrew Warrilow on 01843 572616 or email a.warrilow@e2connect.co.uk

Customer Enquiries: 0800 458 2268