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Ofcom has published its Final Statement on 070 Changes. This forces 070 to be charged at the same wholesale rate as ordinary mobile numbers and comes into force in 12 months - on 1st October 2019.
 

Why is Ofcom doing this?

Ofcom hopes that this very disruptive intervention will benefit consumers. But is it right to determine policy on little more than hope? I explain below, why the more likely outcome is simply a boost to the profits of large phone companies and with no benefit to consumers. A likely total failure by Ofcom due to mistargeted regulation.

The Ofcom Press Release and Statement, highlights...

We are imposing a charge control on all 070 providers, which will cap the wholesale termination rate they can charge. We will impose a charge control on all 070 providers, to be set at the same rate as the mobile termination rate. This will come into effect on 1 October 2019. We anticipate that the likely effect of this will be that the cost of calling a 070 number will, in future, be shared between the person making the call and the recipient.

This move should also clear the way for phone companies to include 070 numbers in free minute allowances, as they currently do for calls to mobiles.

Jonathan Oxley, Ofcom’s Competition Group Director, said: “Millions of calls are made to 070 numbers, but many people aren’t aware of the high costs of calling them. This can lead to people receiving much higher bills than expected.

“So we’re slashing the wholesale cost of connecting 070 numbers. There’s no reason why phone companies shouldn’t pass this saving on to their customers as soon as possible.”

What's Flextel's Position?

I agree with Ofcom's laudable principle of protecting consumers from overcharging and bill shock, but...

For me, the big picture is that mobile companies charge far too much for ALL out-of-plan calls ("free minute allowances"), not just 070 calls; which after all is only a tiny niche market. To deliver real consumer benefit Ofcom needs to target retail call pricing head-on.

Where's the evidence?

One example is that Vodafone charges its customers a whopping 55 ppm (pence per minute - the same as for 070 numbers) to call Flextel's mobile numbers starting 07822 . Yet Flextel charges Vodafone about 0.5 ppm; the same Ofcom controlled rate as all mobile codes. Now Ofcom plans to use the very same rate for 070. So it appears that, unless Ofcom takes additional accurately targeted action, the 070 plan is set to deliver zero consumer benefit.

Why does Ofcom let such blatant price discrimination continue?

It appears that there is no convenient legal instrument available to Ofcom and it is all just too hard. The easy "070 sound bite" appears to be an attractive and much simpler option for a PR sensitive and rather ineffective regulator. For example Oftel (Ofcom's predecessor) rightly insisted on charging consumers for calls on a per second basis. Ofcom has let this important control slide. Now a 6 second 55 ppm call that should cost 5.5 pence, today costs 55 pence. This means that the effective cost per minute of a 6 second misdial is £5.50!

Ofcom appears to be asleep at the wheel, when it comes to tackling the challenging call pricing transparency and consumer bill shock issues. The competition team seem to be unable (or unwilling) to do anything about it. Given that the mobile companies are very interested in maximising profit, to satisfy their shareholders; then I think Ofcom's dream may become a bit of a nightmare. Indeed, to part-quote Jonathan Oxley, I can see every reason "why phone companies shouldn’t pass this saving on to their customers".

So the really big question is... Will the phone companies pass on these saving or just keep the extra money?

To me it's seems absolutely essential that Ofcom takes additional action to ensure that these suggested consumer cost savings actually happen. Otherwise there is no consumer benefit for Ofcom's very disruptive intervention. In simple terms it would be pointless and also actually harmful to society.

So if Ofcom fails to deliver on this promise, then all we will have left is the additional burden for 070 users, who after all are also consumers of telecom services. Of course there is also the benefit of larger profits for the Mobile operators. A nice little windfall delivered by Ofcom to the largest phone companies in the UK, at the expense of over a hundred smaller players. How does this help competition or consumers?

In such a case Ofcom's intervention will have blatantly failed its legal obligation to deliver either a consumer benefit or a competition benefit and will also have destroyed the bonâ fide segment of the 070 market, established for over twenty years.

So what Happens Next?

Unless Ofcom recognises that it has made an error and recants, then on the 1st October 2019, Flextel will be forced to charge 070 users to forward their inbound calls. So if you do not add credit to your account, then your 070 calls will start to fail. If you feel this will put your service or safety at risk, please contact Ofcom and let them know about it, using these contact details.

How can Flextel Help?

We can advise you how to tailor our services to meet your needs. We can save you money by helping you choose the best Monthly Plan to suit your specific application. Alternatively, a year is usually plenty of time to plan number migration to a new code such as 0845. We also have a free changed number announcement service which helps make number changing rather easy. You can also keep this service for as long as you want.

To find out about 070 options, please contact us.

 
William R Goodall BSc CEng FIET
Flextel Founder
1 st October 2018
Sandbach, Cheshire.
 
 
 

From the 1st July 2018 we are introducing some changes to our tariff structure to better reflect current industry practices and also to accommodate changing customer traffic profiles. This means that the costs will be distributed more fairly amongst our customer base.

1. Cheaper international destinations to be included in Landline plans e.g. Eire and Germany

2. VoIP and Voicemail calls to be treated the same as landlines

3. Call recordings outside of a Plan charged at 2 pence per voice file sent
    (includes voicemail, but 070, 084 and 087 numbers remain free of charge)

4. Call setup fee of 2 pence per chargeable call (Free calls and in-Plan calls are not affected)

All prices include VAT. For more details click here.

...and, of course, like everyone else, our Privacy Policy was updated to reflect the new GDPR that came into force on the 25 May 2018.

 
 
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Don't forget to checkout our local geographic codes - we've got the whole of the UK covered. Ideal for any local business, but also for those businesses that need to give a local look for their regional or national call centres.

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We've enhanced our Call Notification service to include alerts via mobile text (SMS). It also includes an emergency Callout escalation process.
 

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