FCS UPDATE
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Adding up the numbers
Changes to a range of non-geographic numbers will affect both the 08 Number Translation Service (NTS) and 09 Premium Rate Service (PRS) number ranges. Jacqui Brookes, CEO of FCS, looks at two big developments that will affect how non-geographic numbers are operated and accessed by CPs in the future.
ollowing Ofcom’s interventions regarding the 0870 and 0871 ranges which have been seen as damaging by many in the sector, with major drops in traffic reported, communications providers have expressed a desire for stability, and particularly with regard to other ranges such as 0844 and 0845 which have become a safe haven for customers who no longer wish to use 0870 and 0871 for their inbound services.
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By the time we go to press we expect that Ofcom will have announced a ‘Non Geographic Calls Services Review’ which in old money would have been called another ‘NTS’ review. The main drivers for the review are Ofcom’s perception that, following a number of changes in regulation and industry behaviours, the NTS model is now effectively ‘broken’ and that this is not always delivering good outcomes for consumers and other stakeholders. The Ofcom project will be a broad ranging strategic review embracing a range of non geographic numbers including PRS, NTS, and Directory Enquiries, but not mobile or paging ranges.
The main focus is on issues relating to the consumer experience. Consumers rightly want to know the cost of what they are buying and to avoid ‘bill shock’ which can arise from calls to numbers in the PRS and NTS ranges. Many consumers do not realise, for example, that calls to 0800 freephone numbers are not always free from a mobile. Call price
transparency is, therefore, sought by many players in the telecoms market including originating CPs, suppliers of numbers and inbound services and those in the PRS sector as well as from consumer groups.
Ofcom’s starting point is that original assumptions about NTS are out of date and the regime is effectively broken. For example, now that BT no longer has SMP in this area many underlying assumptions about the NTS market are no longer valid. Consequently, Ofcom is subject to a series of disputes and CAT referrals on termination and interconnection rates (0800 and 0845 have figured recently) and more potential disputes are in the pipeline.
As a result, the strategic review will look at the high level issues such as transparency and predictability of call prices at both wholesale and retail level, and consider what options are available. Remedies may or may not be regulatory based.
The initial phase of the project, therefore, will be an assessment of the market and collecting information (for example, on the flow of funds in NTS transactions). All players who are involved in non- geographic services at any point in the value chain are encouraged to get involved by sending Ofcom their views on how the current model (wholesale arrangements and revenue sharing) in both NTS and PRS could be improved, what you see as good or bad about the current system and what outcomes you would like
Jacqui Brookes
to see. Ofcom will be issuing an initial request for information to be provided during May and June with a formal consultation based on this feedback to be carried out in the summer. A statement of the new policy principles will then be issued by the end of 2010, although Ofcom anticipates a longer period for full implementation of the new regime.
In parallel with the above review, the PRS sector regulated by PhonepayPlus (PPP) is busy implementing the recommendations set out in the Ofcom statement on its PRS Scope Review which was published in October 2009. PPP is introducing a new code of practice for the PRS industry, based on Ofcom’s recommendations, which may be out for consultation as the May edition of Comms Dealer is published.
The code has a new structure – out will go the pages and pages of dense text and in will come a slimmed down set of principles with guidelines on specific aspects of PRS as appendices. The new code will also include some new obligations on complaints handling.
One of the important changes for the PRS sector is the introduction of a new Registration scheme for everyone in the PRS distribution chain: Originating CPs, terminating CPs, level 1 and level 2 providers
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(who share the revenue or provide the content). All providers will need to become registered and receive an official PPP registration number to be able to operate in the market. If you have views on this tell FCS so that we can ensure telecoms industry views are put forward.
Ofcom has also recommended a strengthening of PRS advertising to align with Ofcom’s approach to the use of PRS in TV programmes, ie, ‘calls from mobiles will cost considerably more’. Finally, and somewhat disturbingly, it should be noted that all of this is taking place in the context of PPP’s own market research which shows that the PRS market is declining significantly.
The following quotes are from the PPP research which can be found on its website at www.
phonepayplus.org.uk: ‘We estimate that premium rate revenues, excluding VAT, totalled £810 million in 2009. This includes £78.2 million generated through 087 numbers, leaving a premium market value excluding 087 of £731.8 million, an 11.4 per cent decline compared to the 2008 equivalent of £826.2 million. Our research suggests that at least part of the decline in the premium rate market is due to more stringent regulation and heavier fines driving out some companies who may not have played by the rules. While that decline is, then, in some ways a ‘positive’ for the consumer, it is clearly an issue for the industry that legitimate services have so far failed to make up the shortfall’. Food for thought.
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