Low cost number ranges could be hit hard by changes to NGCS as moves to shake up the market have seen charges more than double, making transit charges on some number higher than the service charges for the call. The move is likely to see many telemedia providers axe the services and new entrants steer away from the already beleaguered UK PRS market.
Moves to unbundle NGCS that went live on 1 July have seen transit charges for calls move from the originating to the terminating operator have been further complicated by BT – the TO – announcing a doubling of transit charging and adding a further ‘pence per call’ element on top of pence per minute charges. Together these things threaten to make it totally uneconomical for many telemedia companies to offer low cost number ranges as the costs now outweight the charges they can make for the calls.
The effect of removing low cost ranges is that the end users such as catalogue companies and call centres will have to change their numbers and promotional material as the numbers are generally locked to the retail price and increasing the retail price is hard when long-dated printed material carries the price and the number.
It is believed that some industry members are looking at a formal dispute and may raise competition issues as the terminating providers do not have a choice where they get their traffic from.
Rory Maguire, Managing Director of AIME states: “We are aware of the planned wholesale price increases and we are very surprised at both the decision to increase prices by this level within six months from setting them for the introduction of non-Geographic unbundling in July and with the minimal notice to the terminating providers that puts them at financial risk. The effect of this price increase is that the provider of the service is likely to absorb the charge as the retail price is fixed, there is no choice on the transit provider used by the originating provider and there is no immediate opportunity to pass this cost to the consumer.”
Maguire continues: “The area at greatest risk is the number ranges at the low price end of the scale – 1p to 5p per minute – used primarily for customer care centres, sales operations, catalogues, banks etc. and these numbers and their prices are in published material with long shelf lives. Any change to the service charge or the number range to select a new price point takes months and is extremely costly. We do not think that the effect on the businesses that use non geographic ranges at low price points and the ultimate effect on consumer costs was even considered when the transit cost increases were set.”
AIME is consulting with members on the next steps and has already opened discussions with Ofcom. The issue will be covered further in TelemediaOnline over the coming weeks and will be a key area for discussion at World Telemedia Prague 10-12 November.