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Implement Ofcom's Unbundled Tariff for Calls to 084, 087 and 09 Numbers.

Implement Ofcom's Unbundled Tariff for Calls to 084, 087 and 09 Numbers.

Ofcom require telephone providers to implement the "unbundled tariff" system covering the call price for all 084, 087 and 09 numbers by 26 June 2015.

Most readers probably know nothing about the new system. Indeed, many will be unfamiliar with the current situation that applies when calling 084, 087 and 09 numbers and with the reasons why Ofcom are changing the rules. The current system is discussed in detail below and the new system is detailed here:
http://stakeholders.ofcom.org.uk/consultations/simplifying-non-geo-no/final-statement

 

The new system implements transparent call pricing splitting the present call cost into two components with a clear view as to how much the caller's telephone provider retains and how much is passed on to the telephone provider running the 084, 087 or 09 number on behalf of the business or organisation that was called.

Most providers will make the change on 26 June 2015. However, it seems possible that with only a few minor modifications much of the workings visible to callers could be implemented well ahead of that date. Ofcom and others still have some work to do before that point is reached, but GG might like to consider being the first provider with truly transparent call pricing.

26 Comments
augur

The idea is to implement the caller-facing parts of the new Ofcom scheme long before the official date.

 

Currently, when calling an 084, 087 or 09 number, part of what the caller pays for the call is passed (in this case, by GG) on to the phone provider that supplied the non-geographic telephone number to the business or organisation that is being called. In turn, they use this money to cover their costs in handling the call and routing it onwards to its final destination. Those costs are often no more than a couple of pence per minute if routing the call to a UK landline. If there is anything left over after those costs have been met, the called party may receive a "revenue share" payout. For many organisations, this payout is one of the main reasons why they use these numbers.

 

The amount of money that is passed over from GG to the non-geographic provider varies depending on the actual telephone number that was called. The organisation being called chose how much this would be when they originally selected the non-geographic telephone number they wanted to use. This fee is currently known as the "enhanced termination rate" but after some minor adjustments will become known as the "Service Charge" in June 2015.

 

Based on current termination rates, the Service Charge (including VAT) is likely to
- vary from 1p/min to 7p/min for 0843 and 0844 numbers, depending on the exact number called,
- be around 2p/min for 0845 numbers,
- is currently zero for 0870 numbers, but is likely to be around 10p/min after 26 June 2015,
- vary from 7p/min to 13p/min for 0871, 0872 and 0873 numbers, depending on the exact number called,
- vary from 7p/min to £1.53/min (£3.60/min after 26 June 2015) for 090, 091 and 098 numbers, depending on the exact number called.
Some numbers currently have a pence-per-call rather than a pence-per-minute rate and this is likely to continue to be case.
 
Irrespective of the actual Service Charge incurred when calling an 084 or 087 number, GG currently charges all callers 12p/min for these calls. While this appears to make the tariffs simple, these call prices are not transparent. Where an organisation has chosen to use a telephone number with a lower Service Charge than would be incurred by calling the telephone number of a rival business, perhaps in the expectation the caller will pay less for the call, the caller does not actually see this reflected in the price they pay for the call. GG charges all of these calls at the same 12p/min rate. Setting the same price for all 084 and 087 numbers is common among mobile providers, though most charge much higher prices than GG for these types of call - anything up to 41p/min.
 
The present GG tariff sheet sees a large markup on calls to 084 and 0870 numbers with the lowest levels of Service Charge. This compensates GG for the low markup added on calls to other 087 numbers where the Service Charge is much higher. However, Ofcom doesn't think this variable markup arrangement is fair on consumers and so a new system comes into force on 26 June 2015.
 
The new system requires originating phone providers to stop applying a variable markup to these call prices and instead to set a single Access Charge covering all 084, 087 and 09 numbers. The call price is then the Access Charge that GG retains, plus the Service Charge that is paid onwards to the terminating telephone provider.
 
The current "enhanced termination rate" details are known for each block of numbers, and have barely changed in the last decade or more. However, Ofcom and the phone industry have recently started a process to compile a selection of available Service Charges and then set the actual Service Charge for each block of non-geographic numbers. As a starting point, they selected the most commonly used price points from the current system. However, a number of price points that are very similar may end up being combined by rounding them all up to the next penny.
 
So, finally, the suggestion is that once Ofcom and the industry committee have finished their work assigning the various Service Charge levels for each number range, GG should set and declare their proposed Access Charge, publish the table of Service Charges and move to the new system at the earliest opportunity.
 
Of course, if there are any number blocks where the new Service Charge will be a vastly different price to the current "enhanced termination rate" the call price for those number blocks should be based on the current termination levels until 26 June 2015. This will be especially relevant for calls to 0870 numbers which will change from almost zero to a figure that is yet to be decided but is likely to be around 10p/min.
giffgaff head-scratcher

Not disagreeing, but just playing devil's advocate here....

 

Is there any legal obligation for them to commit to this before the required date ?

 

If not then what is in it for giffgaff at this point in time and what steps would they take to recover any lost revenue in the interveening period.

 

If this is a legal obligation which they will have to conform to in due course then does this really need to be raised as a member originated idea and would pre-empting any changes before they are agreed cause confusion should the details change before the deadline.

augur

There's no obligation other than to be ready for 26 June 2015.

 

The current retail call price of 12p/min for all 084 and 087 numbers means GG sees a high profit from each 0845 and 0870 call, a lower profit on most calls to 0843 and 0844 numbers and very little profit on calls to most 0871, 0872 and 0873 numbers.

 

The new system sets the same profit margin on all 084, 087 and 09 calls. There should be no "lost revenue" if GG set that Access Charge at the right level.

 

On the same date, calls to 080 numbers become free from all mobile phones. GG have already been doing that for years.

augur

The first non-geographic numbers have origins way back in the 1980s. A variety of prefixes were used, many of them easily confused with those used for geographic numbers. In 1995, geographic numbers were rearranged to always begin with 01. Latterly some geographic numbers have also used 02 prefixes.

 

During the period 1997 to 2001 a major reorganisation moved the various non-geographic numbers over to prefixes beginning with either 0845, 0870 or 090 and all mobile phones over to numbers beginning 07. After this time, and as more and more non-geographic numbers came into use, several extra prefixes beginning 084, 087, 090, 091 and 098 were added, all allowing revenue sharing.

 

In 2007, the 03 range of non-geographic numbers were added to the mix. These new numbers must always be charged the same as calls to 01 and 02 numbers and this applies whether calling from a landline or from a mobile. In the period 2006 to 2009 Ofcom tinkered with the cost of calls to 0870 numbers but ultimately made things worse for consumers as many users simply migrated to new 0844 and 0871 numbers.

 

In June 2015 the biggest shakeup to the pricing of calls to all numbers in the 08 and 09 ranges takes place, as detailed in the previous posts above. These radical changes bring much needed price transparency, something that has been missing for the last decade or more, and will affect every user of 08 and 09 numbers as well as everyone that calls these numbers. GG has the opportunity to be proactive with these changes.

augur

Changes to phone tariffs and the situation as it may be in mid-2015

 

The current situation is very complicated, and it is not easy to work out what many calls will cost.

 

Ofcom's "simplifying non-geographic numbers" project along with other initiatives should make things more clear over the next few years.

 

Actions include:

  • reducing the Mobile Termination Rate for calls to mobile phones to under 0.5p/min by April 2015 opening the door for inclusive calls to mobiles from landlines,
  • moving 0500 numbers to a new 080 range by mid-2017 so that all freephone numbers begin 080,
  • making calls to 080 numbers free from all phones, including from mobile phones, on 26 June 2015,
  • returning 0870 to revenue sharing with a Service Charge so that all 084, 087 and 09 numbers work in the same way as each other,
  • splitting the call price for 084, 087 and 09 numbers into an Access Charge retained by the caller's provider and a Service Charge passed on to the called party's telephone provider,
  • requiring the Access Charge on any particular tariff to be set at the same rate for all 084, 087 and 09 numbers,
  • requiring the Access Charge and Service Charge to be separately declared, and
  • removing the requirements of the "NTS Retail Condition" from BT's 084, 087 and 09 call pricing on 26 June 2015.

Ofcom has also confirmed the 03 range will be the only non-geographic range with retail call pricing linked to the price of calling geographic (01 and 02) numbers.

 

The tables below depict the projected landscape that GG will have to fit into by around mid-2015.

 

 

Prefixes based on Ofcom's simplified number plan

 

Prefix*Call PricingExceptions
01
02
03
Geographic Rate or, more usually, included in call plan allowance

See notes 1 and 2

070Personal Numbering (call forwarding)-
071 – 075
077 – 079
Mobile Rate or, more usually, included in call plan allowanceSee notes 3 and 4
080Freephone from landlines and mobiles-
084
087
090
091
098
Call price consists of an
Access Charge retained by the caller's telephone provider and a
Service Charge passed on to the called party's telephone provider
-

 * Numbers beginning 0500 are moving to 0808 5 by mid-2017. Numbers beginning 055, 056, 070 and 076 will be reviewed shortly. Numbers beginning 0500, 055, 056 and 076 omitted for clarity.

 

Note 1: exception - landline numbers in Jersey, Guernsey, Isle of Man

Note 2: exception - landline numbers used by dial-through & automated services ("non-landline" numbers)

Note 3: exception - mobile numbers in Jersey, Guernsey, Isle of Man (including 07624)

Note 4: exception - mobile numbers used by dial-through and automated services ("non-mobile" numbers)

 

 

Inclusive Calls

 

Prefix*Call PricingInclusive Call
from landline?
Inclusive Call
from mobile?
Service
Charge?
01
02
03
Geographic RateYESYESNO
070Personal Numbering (call forwarding)NONOYES
071 – 075
077 – 079
Mobile RateYESYESNO
080FreephoneFree CallFree CallNO
084
087
090
091
098
Fixed Access Charge per tariff plus
variable Service Charge by number,
each separately declared.

The Service Charge prevents these calls
counting towards inclusive allowances.
NONOYES

 * Numbers beginning 0500 are moving to 0808 5 by mid-2017. Numbers beginning 055, 056, 070 and 076 will be reviewed shortly. Numbers beginning 0500, 055, 056 and 076 omitted for clarity.

 

 

Access Charge and Service Charge

 

Prefix(Access Charge)*
Caller's provider retains ...
(Service Charge)*
Caller's provider passes on
(Total Call Rate)
Caller pays ...
0843
0844
0845
0870
0871
0872
0873
090
091
098
Caller's provider retains a fixed
rate on every 084, 087 and 09
call. Per tariff, the rate is always
the same irrespective of which
number was called.

This is likely to be around
1p to 10p/min (from landlines)
or
3p to 35p/min (from mobiles)
varying only by tariff and provider,
not by the number called.
1p...7p/min depending on
the number called.
Approx. 2p/min.
Around 10p to 13p/min.
7p...13p/min depending on
the number called.


7p...£3.60/min depending
on the number called.

Caller pays the sum of
the Access Charge and
the Service Charge.

The total call rate paid to
various providers for calls
to a particular number
varies in step with the
Access Charge.

The total call rate paid to
a particular provider for
calls to various numbers
varies in step with the
Service Charge.

 * All amounts include 20% VAT.

 

 

Total Call Rate

 

Prefix*Call PricingCall Rate
from landline
Call Rate
from mobile
Service Charge?
01
02
03
Geographic Rate
(or inclusive)
1p/min to 10p/min
depending on provider.
3p/min to 40p/min
depending on provider.
NO
070Personal Numbering
(call forwarding)
at a Premium Rate
4p/min to 52p/min
depending on
number & provider.
30p to £1.50/min
depending on
number & provider.
YES
071 – 075
077 – 079
Mobile Rate
(or inclusive)
1p/min to 35p/min
depending on provider.
3p/min to 40p/min
depending on provider.
NO
080FreephoneFree CallFree CallNO

0843
0844
0845
0870
0871
0872
0873
090
091
098
Access Charge plus
Service Charge
each separately declared.


The Service Charge
prevents these calls
counting towards
inclusive allowances.
Access Charge
1p/min to 10p/min
depending on the
provider
PLUS variable
Service Charge
depending on the
number called
(see final column).
Access Charge
3p/min to 35p/min
depending on the
provider
PLUS variable
Service Charge
depending on the
number called
(see final column).
1p...7p/min
depending on
number called.
Approx. 2p/min.
10p/13p/min.
7p...13p/min
depending on
number called.
7p...£3.60/min
depending on
number called.

 * Numbers beginning 0500 are moving to 0808 5 by mid-2017. Numbers beginning 055, 056, 070 and 076 will be reviewed shortly. Numbers beginning 0500, 055, 056 and 076 omitted for clarity.

 

 

augur

Current giffgaff pricing situation (May 2014) for 084 and 087 numbers

 

Non-geographic call pricing for 084 and 087 numbers in 2013/2014

 

Prefix(Access Charge)
GG retains ...
*
(Service Charge)
GG passes on ...
*
(Total Call Rate)
Caller pays ...

0843
0844
0845
0870
0871
0872
0873
From 11p to 6p/min
depending on the
number called.
Approx 10p/min.
Almost 12p/min.
From 6p to 1p/min
depending on the
number called.
From 1p to 6p/min
depending on the
number called.
Approx 2p/min.
Almost nothing.
From 6p to 11p/min
depending on the
number called.
Caller pays 12p/min for
all 084 and 087 calls.

 * All amounts include 20% VAT. They are illustrative and not at all exact.

 

The high margin on 0845 and 0870 calls is funding the relatively low price charged for calls to all other 084 and 087 numbers, and presumably also helping to keep calls to 080 numbers free.

 

 

Arrangements after June 2015, based on Ofcom's announcements

 

Non-geographic call pricing for 084, 087 and 09 numbers after 26 June 2015

 

Prefix(Access Charge)
GG retains ...
*
(Service Charge)
GG passes on ...
*
(Total Call Rate)
Caller pays ...

0843
0844
0845

0870


0871
0872
0873
090
091
098
GG retains a fixed
amount on every
084, 087 and 09
call.
e.g. 9p/min
or whatever is
decided.
From 1p to 7p/min
depending on the
number called.
Approx 2p/min.
Likely to be around
10p or 13p/min after
26 June 2015.
From 7p to 13p/min
depending on the
number called.
From 7p to £3.60/min
depending on the
number called.
Caller pays the sum of
the Access Charge and
the Service Charge.

The total call rate
therefore varies in step
with the Service Charge.

 * All amounts include 20% VAT.

 

On 26 June 2015, call pricing for 084, 087 and 09 numbers moves to the "unbundled tariff" scheme where the markup is the same for all 084, 087 and 09 calls. The suggestion here is to implement the caller-facing parts of the new scheme long before the required date.

augur

The "unbundled tariff" also has a requirement that the Access Charge for calls to 084, 087 and 09 numbers be listed amongst the core charges for each tariff. This sits alongside the similar existing requirement for 070 numbers.

 

This will require some re-arranging of the existing price list.

 

 

UK prices

 

Calls

Calls to landlines starting 01, 02, 0310p per minute
Calls to giffgaff mobile numbersFree
Calls to other standard UK mobile numbers
starting 071075 and 077079
10p per minute
Calls to non-mobile 07 numbers.
For detailed listing click here

074060, 074061, 074062, 074063, 074064, 074065, 074066, 074067, 074068, 074069, 074171, 074172, 074176, 074177, 074179, 074181, 074182, 074185, 074186, 074188, 074390, 074391, 074409, 074410, 074411, 074412, 074415, 074417, 074418, 074419, 074515, 074516, 074517, 074572, 074574, 074577, 074578, 074579, 074580, 074581, 074582, 074583, 074584, 074588, 074653, 074655, 075203, 075204, 075205, 075207, 075208, 075209, 075370, 075373, 075375, 075376, 075377, 075590, 075591, 075592, 075593, 075595, 075597, 075598, 075599, 075710, 075718, 075890, 075891, 075892, 075893, 075898, 075899, 077000, 077001, 077442, 077443, 077444, 077445, 077446, 077447, 077448, 077449, 077530, 077552, 077553, 077554, 077555, 078220, 078221, 078222, 078224, 078225, 078226, 078227, 078229, 078644, 078722, 078727, 078730, 078744, 078745, 078922, 078925, 078930, 078931, 078933, 078938, 078939, 079110, 079112, 079118, 079245, 079780, 079781, 079782, 079783, 079784, 079785, 079786, 079787, 079789. hide more info
20p per minute
20p per text
Calls to personal numbers starting 07050p per minute
Calls to freephone numbers starting 080Free
Calls to numbers starting 084 incur a
fixed Access Charge plus a variable Service Charge.
To look up details of the Service Charge click here
tbcp per minute Access Charge,
plus variable Service Charge
from 1p to 7p per minute or call
depending on the number called
Calls to numbers starting 087 incur a
fixed Access Charge plus a variable Service Charge.
To look up details of the Service Charge click here
tbcp per minute Access Charge,
plus variable Service Charge
from 7p to 13p per minute or call
depending on the number called
Calls to numbers starting 090, 091, 098 incur a
fixed Access Charge plus a variable Service Charge.
To look up details of the Service Charge click here
tbcp per minute Access Charge,
plus variable Service Charge
from 7p to £3.60 per minute or
from 7p to £6 per call

 

Texts, MMS, video calls, voicemail, internet
Texts, call forwarding and video calls to giffgaff numbersFree
Texts to standard UK mobiles and landlines6p per text
Premium text messages and shortcodes.
For detailed listing click here

10p network setup fee plus

up to £10 per text received

Twitter and Facebook text updateFree
Mobile Internet (up to 20MB)20p per day
Picture messages (MMS) to giffgaff and other mobiles (max 300KB)16p per MMS
Video calls to other mobiles50p per minute
Call forwarding to other mobiles and landlines10p per minute
Voice mail (443)8p per call

 

Freephone numbers starting 0500Free
Corporate numbers starting 05520p per minute
VoIP numbers starting 0568p per minute
Pager numbers starting 07640p per minute
Police non-emergency number (101)15p per call
NHS non-emergency number (111)Free
Emergency Call (112 or 999)Free
Support helplines starting 116Free
Calls to 118402 Directory Enquiriestbcp per minute Access Charge, plus
tbcp per minute or per call Service Charge
Calls to Directory Enquiries numbers starting 118 incur a
fixed Access Charge plus a variable Service Charge.
To look up details of the Service Charge click here
tbcp per minute Access Charge, plus
variable per minute or per call Service
Charge depending on the number called
Speaking clock (123)15p per call

 

 

phenomenon

Hi Ian,

 

Very inspiring work.

 

This is a real and rare opportunity for giffgaff to steal a march on its competitors and get fully transparent pricing in first.

 

giffgaff have to do it anyway so why not take this as an opportunity to turn it into a PR and marketing advantage?

 

Richard

 

augur

How much people pay for calls to 084, 087 and 09 numbers seems to be a topic that almost no-one is interested in.

 

That surprises me.

big cheese

I'd be surprised if the lack of response from members is down to a lack of interest - more that it's a minefield to look at at-a-glance, and not something you can just skim through on a morning's scroll down the Ideas board.

 

I don't doubt that your work is thorough and accurate - I think the problem is more that it's not aesthetically pleasing to a regular giffgaffer. (Not your fault, by any means - just the way it is.) There's a lot of industry jargon that, even with your explanations, many people may struggle to get their heads around.