Freephone rate change

Simon Woodhead

Simon Woodhead

13th October 2016

Due to changes beyond our control, we will be increasing the charges to receive calls on Simwood 080 Freephone numbers, effective October 19th. These can be found in our Ancillary Voice Services rate sheet.

Essentially the peak-rate for normal (non-mobile or Payphone originated) is unchanged, but the same rate will now apply in evenings and weekends. A 60 second minimum charge will also apply to all incoming calls to our 080 numbers.

This change is due to two factors:

  1. BT have substantially (by up to 47%) increased their “transit charges” – charges we pay to receive calls that transit their network from other networks to our non-geographic ranges. This took effect on October 1st.
  2. BT have sought to impose a 60 second minimum charge on calls to 080 numbers. We have rejected this proposal and, with their somewhat heavy-handed approach failing, they are threatening to refer this to Ofcom [who will determine if the change is reasonable]. If BT are successful, they are seeking to backdate the charges to October 1st – the arbitrary date they demanded this change should be effective from.

In respect of point 1, transit charges have been outside of charge controls for some years given Ofcom considered the market was effectively driving them down. We continue to investigate alternatives to overcome them, and are directly connected with other networks to partially avoid them, but against the background of the apparent effective re-monopolisation of the industry that we have discussed before, this is easier said than done.

Point 2 is less of an issue in isolation, but we seem to be alone in viewing all these minor changes together, and they add up to a lot! BT claim they originate a lot of short (under 12s) duration calls and the current rate (mandated by Ofcom) they charge us and others doesn’t cover their costs. Our view is that we do not wish to make originating short duration calls more viable for them across any number range, and they should instead desist from doing so. Further, considering the transit charges outlined above, we do not believe on aggregate there is any financial pressure for this change, and these changes just seek to increase the profitability of such calls to BT.

Additionally, we believe that pricing for the same on other non-regulated products suggests the actual transit cost to be just 1/13 of what they are now charging us and other Communications Providers with Regulated Interconnects.

We have little confidence that Ofcom will consider the whole picture (not least because they previously decreed the transit market was working) and that the determination would likely be in favour of BT. However, in the event of a favourable outcome for a free, competitive, market we will adjust the rates accordingly.

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