First consultation: Future of interconnection and call termination

In February, we published our statement on the future of landline services. This set out some of the potential benefits to consumers as phone companies move their landline services to newer ‘internet protocol’ (IP) technology. We explained how Ofcom’s rules mean phone users must be protected equally regardless of how their landline phone service is delivered. We also set out the roles and responsibilities of different organisations, and our expectations of telecoms providers as they make these changes.

Telephone calls are important to many people and businesses. Around eight in ten UK households (81%) have a home phone service and 94% of adults use a mobile phone. Nearly all (96%) small and medium sized businesses use landlines and most (64%) use mobile phones. More than 200 billion minutes of phone calls a year are made in the UK, which generates call revenues for industry of more than £3bn.

Although different ways of making calls have emerged - such as ‘Over The Top’ (OTT) voice and messaging applications - and usage of traditional telephone services is falling, phone calls are likely to remain important. As with other platforms, the more people connected to a telephone network, the more each user benefits from the option to contact others. What makes phone services stand out is that it is an open platform, where anyone using a phone service can call any other user, whatever network they are on.

UK telephone networks are undergoing substantial change, as telecoms providers gradually move their landline customers from the country’s traditional telephone network – the ‘public switched telephone network’ (PSTN) – to IP technology.

For most customers, switching to an IP-based service should be straightforward. They will continue to receive what they recognise as a traditional phone service and will keep their existing telephone number. For many, the only change will be that their telephone service will be delivered via a socket on their broadband router rather than a traditional telephone socket. For most mobile customers, the migration will be seamless as networks and mobile handsets move to 4G.

These changes create opportunities. For example, to help identify and prevent nuisance calls and to improve the quality of phone calls. Therefore, it is important that regulation is kept under review through these changes.

Today, we have published three consultations on the future use of phone numbers, and the arrangements between networks. Our aims are to:

• promote competition between providers of phone services, recognising the changing market, where OTT, social media and messaging platforms offer alternatives to traditional phone calls;
• promote confidence in phone numbers and services by tackling nuisance and scam calls and addressing pricing practices that lead to unexpected or unreasonable bills; and
• protect consumers from harm by making sure they continue to have access to important services.

In this consultation, our first consultation on the future of interconnection and call termination, we discuss the factors that may influence future regulation, and potential options for the future regulatory framework.