Non-geographic calls are those made to 03, 05, 070/076, 080, 0845, 0870, 083/4, 0871, 09, 116 and 118 numbers. People use these numbers to call businesses and Government agencies, to get information, make payments for services and vote on TV shows.
How does Ofcom regulate them at the moment?
Ofcom decides how these numbers can be used. For most numbers, there is a limit on how much BT can charge for calls. Other providers are not restricted as to how much they can charge, but in many cases the landline providers set their call charges around BT's prices. From mobiles, charges are typically much higher.
In 2009, consumers paid around £1.9 billion for calls to these numbers. They accounted for around 12% of the total call traffic volume, and generated 10% of the total revenue.
The current system does not work for consumers
Consumers face problems when making calls to these numbers including:
Confusion about the price. People are confused about what these numbers mean and how much calls cost. As a result, they lack confidence and trust in these services.
Consequently, consumers make fewer calls and sometimes go to great lengths to contact organisations in other ways, possibly at higher cost or inconvenience. The lack of scrutiny by consumers means that phone companies can set prices with less concern about the impact on consumers.
Impact on low-income households. The cost of calling these numbers is generally significantly more from mobiles. The impact of the higher cost on mobiles is particularly pronounced for people on lower incomes who are more likely to live in mobile-only households, and use their mobile to call essential services on these numbers; such as some benefit offices, councils, utility services and doctor surgeries.
Call charges are not clearly advertised. Under the current system, those providing services via a non-geographic number can not easily advertise the price of calls to their service (since the price varies between phone companies). This leaves consumers unsure, and prevents competition between providers from working as well as it might.
Wide-ranging changes to benefit consumers
We are consulting on options for wide-ranging changes to the current regulation of non-geographic numbers, and we have set out two sets of proposals today:
- Simpler numbering ranges: The aim of this is to make non-geographic numbers and their prices more intuitive. For example, making calls to 0800 numbers (Freephone) free from mobiles as well as landlines; encouraging the use of 03 (which is charged like 01/02 numbers and usually included in call bundles) through removing the less consistently charged 0870 range, and changing the role of 0845. We also propose to make the division between number ranges clearer.
- Standardised charges phone company charge and service provider charge: Our preferred option to address many of the current problems is to split the charges paid to the phone company and the charges paid to the service provider so that consumers can see exactly how much they are paying, and to whom. We think this could help ensure that consumers will be able to compare phone company costs for calls to non-geographic calls. In addition when call costs are advertised, for example on a TV show, it will state clearly the amount charged to call the service (which would be added to the amount charged by the phone company). For example: "This call will cost £1.50 per minute plus your phone company's charge."
We are also considering the alternative of maximum prices for each number range applying to all phone companies. While this has some attraction, we do not consider that it fully addresses consumer issues.
These proposals can only be implemented if planned changes to the Communications Act occur (these are currently being consulted on by the Government and expected to be introduced in May 2011). Subject to these changes taking effect, and once we have considered the responses to this consultation, we intend to implement our proposals over the next two years.
