Joining the surcharge party

Simon Woodhead

Simon Woodhead

22nd July 2021

By Simon Woodhead

Before starting, let me be absolutely clear that the title does not mean we are about to start passing on surcharges to our customers. We remain unique in NOT doing so and will continue to hold that position as long as we can.

We know other operators are down-playing surcharges, telling their customers that they won’t amount to much each month. If true, why did they pass them on in the first place? The answer I suspect is two-fold: 

  • they’re profiteering by applying a blended surcharge deck that overall wins them additional revenue at a crazy-high margin
  • they didn’t have a clue what the real cost of surcharges would be (still don’t) and chose to pass that risk on to their customers

It is pretty dirty to now claim that they’re not a worry and won’t amount to much after what I’d consider a fundamental breach of trust. I hope their customers remember.

By contrast we continue to not pass on surcharges which means we’re carrying the risk rather than our customers and it is incurring us cost. Of course, we’re greatly helped by technology that still remains unique even after ten years, so we know exactly what every call is going to cost and can mitigate abuse, both in real-time. It feels the honourable and clean position to take though!

So why the blog post…

Well, remember above I said some competitors were charging a ‘blended’ surcharge deck? Every terminating operator that is levying surcharges is doing so at different rates, and not just different rates but different ladders of codes to which those rates apply. So where one may surcharge X for a call from Mongolia, another may surcharge Y and another may surcharge nothing. That could make rates sheets very complex and armed with that ‘get out’ what competitors have done is ‘blend’ to a single highest common denominator to pass on. In other words, they may be surcharging you much more than they are being charged themselves, and indeed surcharging you where they’re not surcharged at all. With surcharges coming to some fixed-line operators from August 1st and most competitors not distinguishing rates by terminating operator, it is logical to conclude that they’re going to be surcharging calls to all operators’ ranges equally whether or not they are actually being surcharged by the terminating operator. We called Vodafone out for doing this for calls they transit to Simwood mobile ranges last month despite us not levying a surcharge on them; they still are.

Whilst we find the whole wheeze egregious, and will maintain our position of not passing surcharges on to customers as long as we can, we’re not stupid. We’re not going to let competitors pocket additional revenue at our expense by surcharging calls to Simwood ranges when we’re surcharging them nothing at all. Thus, we have adopted the same ladder of surcharges as BT on our carrier-side interconnects. Competitors will still be pocketing massive windfall margins if levying a blended £2 per minute surcharge but it’ll be modestly less than it otherwise would be on calls they transit to Simwood ranges.

We don’t normally discuss inter-operator commercials but given our lone and vocal stance on these surcharges, some bright spark might want to expose and twist our position as hypocritical. It isn’t: they’re robbing customers and inflating prices to end users whether or not we surcharge them; by us surcharging them we’re making it less profitable with no consequence for our customers or the end-users. In fact, any gain we may make here assists us in maintaining our position of not passing their surcharges on to our own customers. We’re sure the details will filter out into the public domain shortly but wanted you to know first.

Naturally, if any of this is confusing or unclear, feel free to ask. Our Community Slack is probably the best place for that, or hit up our sales ninjas if not a customer.

Related posts