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Ofcom To End 070 Rip-Off - The Communications Blog - Birchills Telecom

Ofcom To End 070 Rip-Off - The Communications Blog - Birchills Telecom

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Ofcom To End 070 Rip-Off

Birchills Telecom
Published by in News ·
In Summary

Ofcom is proposing a 0.5p/min limit on the price phone companies charge each other for calls to 070 numbers. The cap will work similarly to the one brought in for mobile phone calls. The plan is subject to European approval but will probably come into force in late 2019.

What Are 070 Numbers?

In 1995 the UK telecoms regulator, Oftel (now Ofcom), reserved the whole of the 070 range exclusively for personal numbering. These were intended to be "virtual numbers" which could then connect to a real number. It was widely advertised as being a number for life. You could have one phone number which would follow you around whenever you moved house.

Time has moved on and the idea has been mostly diverted. So now one of the main users is Hospedia who supplies almost all of the UK's hospitals, uses 070 numbers for bedside telephones. Usually, while patients aren't charged to make outgoing calls, relatives are charged as much as 50p per minute for an incoming call.

Up to 20% of calls made to 070 numbers were considered to involve fraudulent activity as the high termination rates serve as an incentive for a range of scams. A cap would help to disincentivise some of this behaviour. Some of the most common types are:

Service provider fraud. These include missed call scams where someone may return a missed call from an 070 number or fake job adverts with an 070 contact number.

International artificial inflation of traffic. 070 providers or those who have an agreement to benefit from the termination charge can organise for large numbers of calls to be placed from countries whose telephone companies don't recognise the difference between 070 and 07 UK mobile numbers. This can mean that the provider charges the scammer the lower 07 rate rather than passing on the much higher 070 termination rate the provider will have to pay.

Identity-related fraud. Service providers don't usually recover any of the termination charge from the recipient of the calls, ie, their own customers, this means they don't know their identity. This leaves 070 numbers open to criminal activity with recipients' identities being concealed.

The Spin

Ofcom issued a document on August 15, 2018, which has been widely reported with a different spin depending on the publisher.

For example, Money Saving Expert claimed “Ofcom has vowed to put a cap on "rip-off" 070 numbers which can cost consumers as much as £1.50 per minute”.

Whilst the Telegraph said “"Rip off" phone bills for worried friends and family calling relatives recovering in hospital are set to become a thing of the past under an Ofcom crackdown”

The Mirror went with “Ofcom says it's capping "rip-off" 070 numbers that 2.6 million people use”

The Reality


Ofcom’s actual document called “Personal numbering – Review of the 070 number range”, which runs to 169 pages, said in the introduction

“070 numbers are designed to be used for personal or ‘follow-me’ services. When someone calls a 070 number, their communications provider pays a wholesale termination charge to the 070 service provider for the call to reach the recipient. The caller is then charged a retail price by their
communications provider for making that call.

Communications providers who hold 070 numbers can set high wholesale termination rates for calls
made to their numbers. This harms consumers, as it leads to high retail prices. Consumers are
generally unable to distinguish 070 numbers from calls made to mobile numbers (which begin with
‘07x’ and are much cheaper to call), resulting in ‘bill shock’. In addition, high wholesale termination
rates provide incentives for the fraudulent misuse of 070 numbers. This has contributed to the 070
number range gaining a poor reputation.

We published a consultation in December 2017 outlining our proposals for regulating this market.
The consultation formed part of the Call Cost Review, announced in May 2017.

This draft statement is today being sent to the European Commission for their review. Once the
European Commission has reviewed the proposal and offered any comments, we will, subject to
those comments, publish a final statement to bring our decisions into effect.”

The paper then went on to announce the following decisions, subject to the Europeans Approval.
Before you read on you need to know:
  • that the abbreviation SMP means significant market power and that
  • a termination rate is the rate paid to the company that makes the final connection to the phone for the call. Ofcom regulates these charges – and they are currently about .5p per minute.

The Ofcom paper then says:

“We confirm our view that the market for 070 numbers is negatively impacted by high wholesale charges, which has led to its reputation being undermined and harm to
consumers.

We have defined 127 separate markets for the termination of voice calls to 070 numbers. Each market corresponds to a provider able to set termination rates for 070
voice calls which have been allocated by Ofcom.

We have designated each of the 127 providers as having SMP for terminating calls to the 070 number(s) it controls.  070 providers have SMP because each has a monopoly
on the termination of calls made to its number range.

We are imposing a charge control on all 070 providers, which will cap the wholesale termination rate they can charge. We will impose a charge control on all 070
providers, to be set at the same rate as the mobile termination rate.

This will come into effect 12 months from the date of the publication of the final statement. We anticipate that the likely effect of this will be that the cost of calling a 070 number will,
in future, be shared between the person making the call and the recipient.”

We Say

Ofcom’s decision can only be welcomed by everyone, except fraudsters and scam artists. The only question is really why they have taken so long to act and why it is still going to take so long to implement. Cheaper calls for all, simplification of the system and fraud avoidance has to be good for all.




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