Changes in FreePhone

Simon Woodhead

Simon Woodhead

22nd July 2013

There’s a few things happening to UK FreePhone (0800, 0808 and 0500 numbers) that you need to be aware of and potentially plan for.

BT PayPhone Access Charges

Effective September 1st BT will be more than doubling the surcharge per minute that it levies on calls to FreePhone numbers. At the interconnect level it will rise from the current 23p to 49p per minute.

We’ll be making some changes before then to make this potentially expensive change easier for everyone:

  • Accept or reject PayPhone calls will be a configurable option on every number
  • We will pass a SIP header indicating that the call is from a PayPhone should you wish to filter more dynamically
  • For customers with their own FreePhone ranges on our ‘Virtual Interconnect – Inbound’ service we will be moving to billing at the actual interconnect rate rather than a blended cost.

OFCOM’s NGCS Statement

This is expected at the end of September this year, giving operators 18 months to implement its requirements. One high profile outcome of that will be making FreePhone calls ‘free to caller’ for everyone, notably from mobiles. Whilst this is great news for consumers it is not for users of FreePhone ranges.

The key reason is that the mobile networks have a track record of arguing convincingly that it costs more to operate a network without wires, than one with. Thus, where with FreePhone the terminating operator pays the originating operator’s charges, these are likely to be materially higher for traffic from mobiles.

If you add to that the propensity for callers to use their mobiles rather than fixed lines and 0800 ranges will potentially see a substantial increase in calls. Whilst good at one level, those incremental calls will all likely be at a higher cost.

So what does this all mean?

For consumers this is great news – more utility from the mobile contract and no more paying 20p-odd per minute to call “free” numbers. It is another nail in the coffin of the PayPhone though as an increasing quantity of FreePhone numbers will become unreachable from them.

For those using FreePhone numbers the cost per minute and volume is almost certainly going to increase. We need to await the actual OFCOM statement and gauge the magnitude of mobile origination charges. If they’re close to now we may simply need to tweak the rates we charge. If there is a wide gap (as we expect) then blending rates seems unfair, although this is what we expect our peers to do. In that situation we expect to introduce split pricing so customers achieve a blended price reflective of their own traffic, not ours.

Action to take

We’d suggest considering alternative number ranges. 03 for example is reachable nationally at the geographic rate and is included in the “free” minutes the mobile operators generously give customers. As we do not charge for 03 numbers and they presently attract no charge per minute unlike FreePhone, this effectively gives free incoming calls to the caller and callee from landlines and mobiles.

If you have your own FreePhone ranges “hosted” with another operator you may wish to look at migrating those ranges to Simwood. As far as we can tell other operators will be blocking/allowing PayPhone access for entire number ranges and will likely be offering a blended rate for incoming calls from mobile/fixed. We will offer PayPhone access configurable per number, or per call if you use the SIP headers and we will bill based on the actual cost. When you’re paying for capacity for a Virtual Interconnect in order to get raw interconnect pricing we don’t think you should be paying a blended rate per minute with operator margin built in.

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