Number Translation Services: A way forward

  • Start: 28 September 2005
  • Status: Closed
  • End: 06 December 2005



1.1 In this document, Ofcom publishes the results of its re-examination of the regulatory framework for Number Translation Services ('NTS').

1.2 This document is the second formal stage of Ofcom's re-examination of the regulatory framework for NTS. Ofcom issued a consultation in October 2004 entitled Number Translation Services: Options for the Future ('the October 2004 Consultation') in which it proposed changes to the regulatory regime designed to address growing concerns amongst industry and consumer stakeholders about the operation of the current regime.

1.3 The current arrangements for NTS enable calls to 08 and 09 non-geographic telephone numbers to be used by businesses and other organisations to provide a wide range of telephone services e.g. pay-as-you-go dial-up internet access, telephone banking, tele-voting and business contact services.

1.4 NTS calls provide a micro-payment mechanism for a wide variety of value added services, as well as a means of access to these services. With the exception of Freephone calls, a significant proportion of NTS retail call revenues is passed on to NTS service providers ('SPs') receiving the call ('a revenue share') - over a quarter on average for 0845/0844 calls and over a half for 0870/0871 calls[ (-1-)].

1.5 This consultation document addresses certain policy issues associated with the NTS regime as it applies to the 08 number ranges rather than the 09 range.

1.6 In this document, Ofcom reviews the responses to the October 2004 Consultation and makes revised proposals for changes to the regulatory regime for 08 numbers.

Stakeholders concerns

1.7 The existing NTS framework has been extremely successful in terms of the large number of new and innovative value-added services that have been made available to UK consumers as a result. However both consumers and those involved in their provision have concerns about the current regulatory arrangements for NTS calls. For consumers, the main concerns are:

  • Consumer protection: some consumers argue that revenue sharing should be stopped completely on 08 numbers, because there are no adequate consumer protection measures in place to prevent consumers potentially being overcharged or otherwise exploited on 08 services. This is particularly the case where callers have no choice over the number called, for example, calls to a public service or an after-sales support service.
  • Price transparency: Ofcom's research shows that consumers have a very low level of awareness of the price of 084 and 087 calls, because most consumers believe that the calls cost much more than is really the case. There is an economic cost associated with this lack of price transparency, because tariff misperceptions give rise to inefficient purchasing decisions.
  • Misleading advertising: the link for customers between the prices of calls to 0845 and 0870 numbers and local and national geographic call charges has broken down, as most customers now pay more for calls to 0845/0870 numbers than they do for geographic calls. This has given rise to the potential for misleading advertising as some 0845/0870 services are advertised as being charged at geographic call rates, when in fact they are more expensive.
  • Adult services: there is concern about the growth of adult services on 0870 and 0871 numbers because if consumers wish to bar them, they need to bar access to all 087 numbers as the adult services are not on specific number ranges.
  • Internet diallers: there has been an increase in the incidence of rogue internet diallers on 087 numbers which the Independent Committee for the Supervision of Standards of Telephone Information Services ('ICSTIS'), the premium rate services ('PRS') regulator, does not currently regulate.
  • Call centre waiting times: many consumers are irritated and annoyed by long call centre waiting times. Where the call centres use revenue sharing NTS numbers, there is an additional concern that waiting times may be deliberately extended in order gain extra revenue.
  • Provision of public services: there has been growing concern over the inappropriate use of revenue sharing numbers by some public services, fuelled by several cases which have attracted a high level of media attention. The problem has been exacerbated by the fact that many NTS numbers may not be accessible from overseas networks, preventing access for UK residents who are overseas or other international callers.

1.8 In addition to these consumer issues, Communications Providers ('CPs') and SPs have several concerns with the interconnect arrangements for NTS calls:

  • Revenue uncertainty on 0845/0870 calls: Under current arrangements, the amount Terminating Communications Providers ('TCPs') receive for terminating 0845/0870 calls made from BT lines is effectively beyond their control. It is a residual amount, obtained by deducting BT's cost-based charges for call origination from BT's standard geographic call charges, less applicable discounts. As a result, CPs face a high degree of revenue uncertainty, as do SPs, whose revenue shares usually depend on the amount received by the TCPs. This situation has caused a succession of interconnection disputes between CPs, several of which have required regulatory intervention.
  • OCPs lack of control over payments for call termination: Several Originating Communications Providers ('OCPs') other than BT argue that they are effectively obliged to pay the same termination charges as BT for NTS calls, and regard this as unfair as they face different costs to BT.
  • BT's NCCN 500 charges: With effect from 1 May 2004, BT increased its charges for terminating 0845, 0870 and 0820[ (-2-)] calls. Other CPs strongly oppose these price increases, which they believe represent an abuse of BT's dominance in the markets for call origination and / or NTS call termination. As a result, Ofcom is undertaking a Competition Act investigation into BT's NCCN 500 charges, to assess these claims.
  • NTS Market Review: Ofcom is currently undertaking a market review of the market for NTS call termination.
  • Ofcom expects to publish the findings of both the market review and the investigation separately, and does not consider the issue further in this document.


1.9 Ofcom received over 100 responses to the October 2004 Consultation on the future of NTS. In light of those responses, and subsequent research, Ofcom has significantly amended its initial proposals. The proposals set out below reflect a revised approach to the future of these services. As these proposals are sufficiently different to those put forward in October 2004, Ofcom wishes to consult further to seek stakeholders' views on both our revised policy approach, and on the implementation of that policy. The main elements of the proposals are:

1.10 Restore geographic link for 0870 calls: following a 12-month interim period (detailed below), Ofcom proposes to require that calls to 0870 numbers are charged at the same rate as national calls to geographic numbers, from all fixed and mobile phones, including payphones. The requirement would apply on a customer by customer basis: that is, if a customer is on a particular call package, the rate applicable to geographic calls under that package would also apply for 0870 calls. These requirements would be introduced through an amendment to the National Telephone Numbering Plan[ (-3-)] ('the Plan') and also to the General Conditions of Entitlement[ (-4-)]. This proposal would lead to a significant reduction in 0870 call charges, and the extent of revenue sharing on this range. Where an OCP chooses to vary its NTS call charge from the geographic rate, it would be required to provide a free of charge call pre-announcement informing the customer of the price of the call. The interim period of 12 months is designed to allow time for CPs and SPs to prepare for the changes.

1.11 Remove 0870 calls from the scope of the BT NTS Call Origination Condition: assuming that the geographic link is restored for 0870 calls at the same time, Ofcom proposes to remove the 0870 number range from the scope of the regulatory mechanism that supports revenue sharing - the BT NTS Call Origination Condition ('the NTS Condition')[ (-5-)]. In practice this is likely to lead to an end to revenue sharing on the 0870 range because there would be little revenue available to pass on to SPs.

1.12 Price ceilings during one year 0870 interim period: During the proposed 12- month interim period, the designation of 0870 numbers in the Plan would be amended so that the current prices from BT lines would be de-coupled from the standard rates for national geographic calls and replaced with designations that reflect the current prices. The ceilings would be designed as maximum charges to ensure that retail prices do not rise in nominal terms on that number range during the interim period. BT has provided an undertaking aimed at providing TCPs with greater certainty over the level of termination payments during the interim period.

1.13 Extend PRS regulation to 0871 numbers: Ofcom also proposes that 0871 numbers should be brought within the current regulatory framework for Premium Rate Services[ (-6-)] ('PRS') which would, in effect, mean that services using the 0871 number range would have the same obligations as those using 09 numbers. This would require the agreement of ICSTIS to extend the scope of its regulation, through its approved Code of Practice ('the ICSTIS Code'), to 0871 numbers. As 0871 numbers are usually priced between 5p and 10p per minute (but may be lower), Ofcom would need to extend the definition of those services which are currently defined as Controlled Premium Rate Services ('Controlled PRS'), as set out in Ofcom's PRS Condition[ (-7-)] (through which Ofcom is able to enforce breaches of ICSTIS directions). This definition currently only includes calls that exceed 10p per minute (and chatline services). This measure would provide a greater level of consumer protection. Amongst other things, it would mean that:

  • information on call prices would be required to be displayed on advertisements for services using 0871 numbers; and
  • internet diallers on the 0871 numbers would be subject to the ICSTIS prior permissions regime for internet diallers.

1.14 At this stage, Ofcom is seeking views on the general principle of this proposal and intends to set out its proposal in detail in a separate consultation.

1.15 Extend PRS regulation to adult services currently provided on 08 numbers: Ofcom proposes that adult services currently provided on 08 numbers should be brought within the regulatory framework for PRS regardless of the call price, by amending the Plan to clarify that adult services should only be provided on the 0908 and 0909 ranges that are designated for adult services. This would require all adult services currently provided on 08 numbers to move to the 0908 and 0909 ranges. This would enable consumers to bar these services, without losing access to other services provided on 08 numbers. ICSTIS already regulates adult services provided on the 09 range regardless of price so it would not be necessary for ICSTIS to modify the ICSTIS Code to regulate the adult services previously provided on 08 numbers. However, Ofcom would need to extend the definition of Controlled PRS, as set out in Ofcom's PRS Condition, to encompass all adult services regardless of price.

1.16 At this stage, Ofcom is seeking views on the general principles of these proposals and intends to set out its proposals in detail in a separate consultation alongside the proposals to extend PRS regulation to 0871 numbers.

1.17 Two-year interim period for 0845 calls: The 0845 number range is used for pay-asyou-go dial-up internet access as well as a range of voice services. Nearly 6 million consumers continue to use pay-as-you-go dial-up internet services[ (-8-)]. If the linkage to geographic call charges were restored, these services would be forced to move to other number ranges in order to continue to charge consumers for services in this way. The cost for Internet Service Providers ('ISPs') and the associated disruption to their customers of migrating them to a new number range, would at present exceed the estimated benefits of restoring the link to geographic charges, and the resulting reduction or elimination of revenue sharing on this range. Ofcom has therefore taken the view that immediate changes to the 0845 range would not be proportionate. Ofcom instead proposes a two-year interim period, during which the designation for 0845 numbers would be amended in the Plan so that calls made from BT lines would be at BT's current rates, i.e. in the manner described above in relation to the 12- month interim period for 0870 calls. BT has provided an undertaking aimed at providing TCPs with greater certainty over the level of termination payments during the interim period. Since pay-as-you-go dial-up internet usage continues to decline in favour of broadband connections, the interim arrangement for the 0845 range would be reviewed towards the end of the two-year period, to see whether pay-as-you-go internet traffic on the 0845 range had declined sufficiently to restore the linkage to geographic charges.

1.18 Guidance for public bodies: Ofcom does not consider that it currently has sufficient grounds to justify preventing public bodies using revenue sharing NTS numbers. However, Ofcom has already stated its view that public bodies should consider carefully whether it is appropriate to use 084 and 087 numbers in place of Freephone or ordinary geographic numbers. In particular, Ofcom believes it is inappropriate for public bodies to use NTS numbers exclusively (i.e. without at a minimum, giving equal prominence to a geographic alternative) when dealing with people on low incomes or other vulnerable groups. Ofcom has been active in providing advice to the Government's Central Office of Information ('COI') and Government Departments and will continue to provide this support. Ofcom would like to see a greater level of compliance with the COI's published guidelines on the use of number ranges, given the level of public disquiet over this issue, and would be keen to support the Government in achieving this objective.

1.19 Better visibility of NTS tariffs: In Ofcom's view, the lack of pricing transparency and low level of price awareness has been a major contributory factor to consumer concerns about NTS calls. As one of several measures aimed at tackling this issue, Ofcom proposes to amend General Condition 14[ (-9-)] (which relates to Codes of Practice) to require CPs to give greater prominence to NTS prices on websites, published price lists and promotional material. One of the objectives will be to ensure that consumers are better informed about NTS call charges. Ofcom plans to issue a separate consultation on this proposal.

1.20 As noted above, if the 0871 range is brought within ICSTIS' regulation SPs would be subject to ICSTIS requirements in respect of pricing information. Ofcom has also contributed to the Advertising Standards Authority/Committee of Advertising Practice ('ASA/CAP') guidance to advertisers on advertising NTS numbers. This guidance states, amongst other things, that advertisements should provide consumers with pricing information on the price of NTS calls and should not refer to 084 or 087 numbers as being charged at the "national" or "local" call rates.

1.21 The 0871 range: Ofcom proposes to leave the current pricing and interconnection arrangements in place for the 0871 range. However, all three measures to improve pricing transparency described above would apply to this range. Firstly the proposed modification to General Condition 14 to improve the visibility of NTS tariffs, secondly the provisions of the ICSTIS code on advertising of call prices and thirdly the ASA/CAP guidance to advertisers on how NTS call prices should be advertised.

1.22 The 0844 range: Ofcom proposes to leave the current pricing and interconnections arrangements in place for the 0844 range. However, two measures to improve pricing transparency described above would apply to this range. Firstly the proposed modification to General Condition 14 to improve the visibility of NTS tariffs and secondly the ASA/CAP guidance to advertisers on how NTS call prices should be advertised.

1.23 At present, Ofcom has no significant evidence of consumer protection concerns in relation to the 0844 range, and believes that the scope for harm is much lower than on 087 numbers due to the lower price designation in the Plan (up to 5p per minute compared with 10p per minute for 0871). However, if Ofcom's proposals are implemented, the 0844 range would be the only 08 range available for general use that facilitates revenue sharing and which would not be subject to PRS regulation. As a result it is possible that some of the services that have been the cause for concern on the 0870 and 0871 ranges might 'migrate' to the 0844 range. Ofcom would therefore continue to monitor complaints and other indicators to see if consumer concerns arose on the 0844 range so that appropriate measures such as a further extension of PRS regulation could be taken if necessary.

Responses to October 2004 Consultation

1.24 In the October 2004 Consultation, Ofcom expressed a preference for a pricing and interconnect option described as 'extended price competition', under which BT's retail prices for 0845 and 0870 calls would no longer be linked to geographic call prices, but would be selected by SPs and TCPs from within designated price ranges. A number of consumer protection measures were also proposed. Ofcom received over 100 responses to the October 2004 Consultation, including 74 from consumers and consumer groups.

1.25 Ofcom's proposals were generally not well received by consumers, who believed they would exacerbate the problem of price transparency by leading to a proliferation of prices for calls to 0845 and 0870 numbers. They also felt that the proposed consumer protection measures were too weak, and that insufficient weight had been attached to consumer interests in developing the proposals.

1.26 The responses from two other regulatory bodies, LACORS and ICSTIS, argued that a ban on revenue sharing would be disproportionate and that priority should be given to improving price transparency.

1.27 CPs were not generally supportive of Ofcom's proposals, with several arguing that insufficient attention had been paid to practical implementation problems associated with number portability and migration. Most CPs were strongly opposed to any restriction on revenue sharing, and several proposed new options for consideration.

1.28 SPs and business associations generally felt that the NTS regime provided a useful payment mechanism and should be protected. Of the options presented in the October 2004 Consultation, these respondents generally felt that Ofcom's preferred option was the best, although several variants were proposed.

Research and Analysis

1.29 In the light of these responses, and in particular, the polarisation of views between consumers and industry, Ofcom has undertaken a major programme of market research and analysis to further explore the issues raised by respondents. This will ensure that any new proposals made are also based on a solid empirical foundation. The main findings from that programme of work are summarised below.

1.30 Consumer research:

  • The majority of residential consumers are aware of and use NTS numbers but are confused about the price of calls, and as a result are often apprehensive about making them.
  • Fewer than one third of consumers are aware that SPs are allowed to receive a share of the call charge. Views on whether revenue sharing should be permitted were quite polarised with almost half believing that revenue sharing should be allowed and approximately one-third believing that it should not be allowed.
  • Ofcom's Contact Centre has received a steady stream of complaints relating to 08 NTS numbers, of which approximately two-thirds concerned allegations of scams involving, for example, rogue diallers and mobile phone ring tones. Ofcom has also received a number of letters from Members of Parliament, mostly forwarding complaints about NTS on behalf of their constituents.
  • Evidence from focus group research indicates that consumers support measures to reduce confusion over call prices rather than to curtail revenue sharing. Quantitative research findings show support for measures that would cap the price of calls or make them the same as ordinary geographic calls. Whilst most consumers supported pre-announcement of call charges, almost half thought they would find them annoying.

1.31 Business research:

  • The clear message from Ofcom's focus group research and discussions with large business users of NTS numbers, was that the availability of a revenue share was not the main reason why most businesses use NTS numbers. NTS numbers were typically used because of the call routing features they provide and for the ability to retain the number when moving to a new location.
  • For most SPs that receive a revenue share from calls to their NTS numbers, the amounts received were generally small in terms of the costs incurred in providing their services and were often small in absolute terms.
  • The results of Ofcom's quantitative research with SPs showed a slightly different picture with approximately 40% of SPs regarding the revenue share that they received as important to their businesses.
  • Very few SMEs knew the exact price that their customers would pay to call their NTS numbers, but most were aware that consumers are confused about the price of calling NTS numbers and would welcome measures to provide consumers with more clarity.

1.32 Locked in calls:

  • On average, approximately 20-30% of 084 and 087 calls are estimated to be locked-in, in the sense that the caller is unlikely to have a choice about the number called. The proportion of locked in calls varies from 5% for 0845 calls, most of which are to dial-up internet services, to around 45-55% for 0870 calls.
  • It was not possible to calculate in economic terms, the actual detriment to consumers associated with locked-in calls to 084 and 087 numbers. However, Ofcom was able to estimate the ceiling for the potential detriment by estimating the extra costs to consumers of calling NTS numbers instead of ordinary geographic numbers. Ofcom's estimates indicate that the maximum potential cost to consumers of locked-in calls to 084 and 087 numbers is approximately £67-83m[ (-10-)] p.a., of which £59-72m p.a. is accounted for by 0870 calls. Ofcom believes the actual detriment to consumers is considerably less than this, on the assumption that most of the downstream services markets where NTS numbers are used, are effectively competitive and therefore the revenues from NTS calls result, to some extent, in lower prices for other goods and services supplied by the businesses that use NTS numbers.

1.33 Price misperceptions:

  • Research carried out in June 2005 showed that on average, consumers believed that 0845 and 0870 calls were priced at 26p per minute and 36p per minute respectively, whereas in fact the prices of calls from a BT line were 3.95p per minute and 7.91p per minute at peak times before applicable discounts.
  • Ofcom estimates that the consumer detriment resulting from price misperceptions (in economic terms) is approximately £190m p.a. and £115m p.a. respectively on the 0845 and 0870 number ranges.

1.34 Call centre waiting times:

  • Ofcom research found no significant correlation between call centre waiting times and the size of the revenue share on NTS calls. The mean waiting times for the number ranges tested were 11 seconds for 0800 numbers, 17 seconds for 0845 numbers and 13 seconds for 0870 numbers. The majority of calls (80%) are immediately connected to an operator.
  • For those calls that were not answered immediately, the results were perhaps indicative of greater efficiency in call handling rather than any attempt to extend call waiting times since the more expensive calls had shorter waiting times (the mean waiting times were 96 seconds for 0800 calls, 64 seconds for 0845 calls and 59 seconds for 0870 calls).

1.35 Use of NTS numbers by the public sector:

  • Based on a review of entries in two public sector directories, Ofcom found that approximately 1-2% of public sector telephone numbers were NTS numbers. Given that NTS numbers are often used for high call volume applications, Ofcom considers it likely that a considerably larger proportion of consumer calls to public sector services are to NTS numbers.

1.36 Migration costs:

  • Ofcom estimates that, if revenue sharing ended on the 0845 and 0870 number ranges, 85-90% and 45-55% of call volumes respectively would migrate to other number ranges, where revenue sharing could continue.
  • The one-off costs of this migration are estimated to be £44-50m and £70-90m respectively for the 0845 and 0870 ranges. It should be noted that whilst the absolute migration costs are likely to be higher for the 0870 range, the majority of the 0845 migration costs relate to ISPs. As the market is already declining as a result of the growth of broadband, any migration and its associated costs may accelerate this decline.

1.37 Call pre-announcements:

  • Ofcom estimates that the one-off cost of introducing OCP call preannouncements for all 084 and 087 calls would be approximately £70-100m. There would also be additional ongoing operational costs incurred by CPs.

Contributory factors

1.38 In Ofcom's view, a number of factors have contributed to the issues which have arisen in relation to NTS calls, including the following:

1.39 Underlying instability of the 0845/0870 model: The 0845/0870 model is a revenue sharing model in which the revenue share is effectively determined by the OCP, who typically has only a limited interest in its size. OCPs and BT in particular, set their retail prices, and discounts thereon, in response to competitive conditions in the retail market for calls. The revenue share is a by-product of these decisions, which has considerable commercial significance to TCPs and SPs, who want to see it maintained. It was probably inevitable that these conflicting incentives would lead at some point to a breakdown in the model, with the link between 0845/0870 and geographic prices being broken. That point has now been reached.

1.40 Consumer protection and the growth of 08: Where part of the revenue from a call is passed on to the receiving party as a micro-payment or revenue share, some additional consumer protection issues are bound to arise. This is because the availability of revenue share provides an incentive for unscrupulous SPs to mislead or exploit consumers, for example through the use of rogue diallers. ICSTIS is tasked with providing additional consumer protection in respect of PRS, and regulates the content, promotion and overall operation of services through its code. However, ICSTIS currently has a policy of not regulating services on 08. In effect, this means that ICSTIS only regulates services costing more than 10p per minute or per call or chatline services. The 10p per minute cut-off was considered appropriate because the likelihood of consumer harm, for example through running up very high phone bills, was thought to be far greater on calls costing more than this amount. But with micro-payments totalling over £300m p.a.[ (-11-)] being made on 084 and 087 numbers, there is now greater scope for consumer exploitation on calls costing less than 10p per minute. The definition of Controlled PRS in the PRS Condition also reflects this approach. Ofcom and ICSTIS therefore agree that there is a strong case to extend the current PRS regulatory regime to ensure that consumer are protected from the potential for consumer detriment arising from 08 numbers.

1.41 Locked-in calls: A further contributory factor is that in some cases, consumers may have no choice over the number to call, are 'locked-in' to calling a particular number, and may therefore be vulnerable to over-charging. Callers may typically have a choice when calling a theatre booking agency for example and could therefore choose one that uses a geographic number in preference to one that uses an 0870 number. By contrast, callers may have no choice, for example, about calling a public service, or a service provided by a dominant supplier in a downstream services market, or an after-sales service.

1.42 Standard rates and revenue shares: Some consumers are concerned that the use of revenue sharing numbers is becoming institutionalised, accepted as a normal way of doing business, and may not be conducive to giving consumers good value for money. This concern is especially strong in relation to 0870 calls, because they are charged at a standard rate which may incorporate a significant revenue share, and which does not allow customers to shop around on the basis of call price, because most locked in services feature on this range: even in a reasonably competitive market, all the suppliers may use 0870 numbers. Competitive pressures will in many cases ensure that revenue shares are used to reduce the charges for other goods or services, but that is unlikely to happen in all situations. The combination of standard rates and revenue shares is not designed to promote competition.

1.43 Price awareness and market failure: The low level of price awareness points to a market failure in the market for NTS calls. In the case of 0844 and 0871 calls, this can be attributed in part to the complexity of the tariff structures. But more generally, it would appear to result from a combination of (i) CPs having insufficient incentive to ensure that their customers understand NTS call prices, and (ii) some consumers having little interest in finding out more.

1.44 BT focus of numbering plan: Another factor that has contributed to recent problems is that the numbering designations in the Plan only apply to calls made from BT lines (excluding payphones). This is a reflection of BT's historically dominant position in the market for calls, but in an environment with growing competition it looks increasingly anachronistic. It has meant that calls, which are charged at broadly the same rate as geographic calls from a BT line, can be much more expensive than geographic calls when made, for example, from mobile phones or payphones. This has understandably been a source of confusion and annoyance for some consumers.

Rationale for proposals

1.45 The proposals are designed to address the issues identified, and their underlying causes, in a manner which will promote the following policy objectives:

  • Price transparency - consumers should know what they are paying for calls;
  • Range and choice of services - consumers should have access to a wide range of services and a choice of suppliers;
  • Consumer protection - the use of 08 numbers as a micro-payment system should be accompanied by measures which provide an adequate level of consumer protection, particularly for vulnerable consumers;
  • Viability of pay-as-you-go dial-up internet access - there are still nearly 6 million customers using dial-up internet access services and the viability of this market should not be undermined;
  • Promotion of competition - regulation should promote competition between CPs and SPs, consistent with reasonable levels of cost recovery and revenue certainty.
  • Reduced regulatory intervention - Ofcom should operate with a bias against regulatory intervention and should avoid imposing any unnecessary burden on consumers, suppliers or other stakeholders.

1.46 These policy objectives are in line with Ofcom's general duties under section 3 of the Act and Ofcom's duties for the purposes of fulfilling Community obligations under section 4 of the Act. In particular these objectives are intended to further the interests of citizens in relation to communications matters encourage the provision of network access and service interoperability and to further the interests of consumers in relevant markets and promote competition.

1.47 The proposals serve these objectives in the following ways:

  • Price transparency: The proposals would improve price transparency by:
    • restoring the link between 0870 and geographic call charges after the interim period, and extending that linkage so that it applies not only from BT phones, but also from all fixed and mobile phones, including payphones (subject to CPs being able to use a pre-announcement which is free-of-charge to the consumer if the CP wishes to charge more than their standard geographic call charge);
    • extending pricing information requirements set out in the ICSTIS Code to 0871 calls;
    • requiring CPs to give more prominence to NTS prices on price lists, websites and promotional material by amending General Condition 14.
  • Range and choice of services: The proposals would promote the availability of a wide range of services by continuing to allow revenue sharing at a range of price points on 08 and 09 number ranges.
  • Consumer protection: The proposals would improve the degree of consumer protection on 0871 calls by:
    • bringing these numbers within the regulatory regime for PRS;
    • reducing the risk of over-charging for locked-in calls to 0870 numbers;
    • clarifying the designation in the Plan that all adult services to be provided on the 0908 and 0909 ranges only so that if consumers wish to bar these services, they do not need to bar all other 08 services at the same time and bringing all adult services regardless of price within the definition of Controlled PRS.

    The ending of revenue sharing on 0870 calls would also alleviate consumer protection concerns on this range.

  • Viability of pay-as-you-go dial-up internet access: Pay-as-you-go dial-up internet access services would benefit from the continued availability of revenue shares on 0845 numbers for at least the next two years, and from the higher degree of revenue certainty afforded by BT's voluntary undertaking.
  • Competition and revenue certainty: The proposals to improve price transparency would promote more effective price competition on all NTS number ranges. TCP/SP revenue certainty would be assisted by BT's voluntary undertaking and by restoration of the geographic link for 0870 calls.
  • Reduced regulatory intervention: The need for regulatory intervention to resolve interconnect disputes is likely to decline as a result of the improved level of TCP revenue certainty. Ofcom acknowledges that its proposals for 0870, in particular, could cause some disruption for TCPs and SPs, but the results of its research and analysis indicate that the costs involved are likely to be outweighed by the associated benefits.

Alternatives considered

1.48 A wide range of alternative options were considered and rejected, either as being infeasible, or following evaluation against the objectives referred to above. The various options are reviewed in Section 5 of the consultation document.

Next steps

1.49 The closing date for responses to this consultation is 6 December 2005. Guidance on how to respond is set out at Section 11. Following receipt and consideration of responses, Ofcom will set out its policy decision on changes to the NTS regime in a Statement likely to be published in the first quarter of 2006.

1.50 If Ofcom decides to proceed with the approach proposed, the measures involved in implementation will include:

  • Interim solution: modification of the Plan to remove the link between 0845 and 0870 prices and BT's local and national geographic rates. In order to minimise delay should the proposals be adopted, Ofcom has included the necessary notification of proposed modifications to the Plan and the draft Direction to make associated changes to the 08 numbering applications form at Annex 11 and 12 of the consultation document;
  • Extending PRS regulation to 0871 numbers: This would require ICSTIS agreement to extend the scope of its regulation through its approved Code to 0871 numbers and Ofcom to extend the definition of those services which are currently defined as Controlled PRS, as set out in Ofcom's PRS Condition. In order to extend the definition of Controlled PRS Ofcom would be required to consult, and Ofcom would expect to publish this during the 12-month interim period for 0870 numbers;
  • Extending PRS regulation to adult services currently provided on 08 numbers: This would involve Ofcom clarifying the designation in the Plan that all adult services must be provided on the 0908 and 0909 number ranges and also amending the definition of Controlled PRS to apply to all adult services regardless of price. Ofcom hopes to combine a consultation on these proposals with the consultation on extending PRS regulation to 0871 numbers;
  • CP obligations to publish NTS tariff information: a separate consultation on the proposed amendment to General Condition 14, which Ofcom is publishing on 28th September 2005;
  • Restoration of the geographic link for 0870 calls: further modification of the Plan and 08 application form, which would be the subject of a separate consultation, during the 12-month interim period for 0870 calls;
  • Removal of regulatory support for revenue sharing on 0870: removal of 0870 from the scope of the NTS Condition. Ofcom's initial thoughts are that the consultation on these changes could be combined with the consultation on the restoration of the geographic linkage for 0870 calls; and
  • Review of interim arrangements for 0845: a further policy review, to be completed towards the end of the two year interim period for 0845 calls; and
  • ASA/CAP guidance to advertisers: Ofcom will continue to provide support to the ASA/CAP for its guidance on advertising NTS numbers.

Important advice for communications providers and service providers

1.51 Ofcom strongly advises communications providers and service providers not to act on the basis of these proposals as far as they relate to number migration but to wait until Ofcom has published its statement setting out its decision. In particular, Ofcom advises against any premature migration of services to new numbers within the 08 range on the basis of these proposals.

1.52 Ofcom intends to undertake a strategic review of its numbering strategy. At this stage, work on the strategic review is not far enough advanced to gauge the impact on the 08 number ranges potentially affected by the proposals in this consultation. However early research does indicate that some number ranges may become exhausted in the medium term. Ofcom is therefore considering whether a wider restructuring of the 08 range is required.


1.- This information was mostly derived from submissions from Originating Communications Providers (OCPs) and Terminating Communication Providers (TCPs) in response to a formal information request from Ofcom prior to the October 2004 Consultation. The results of Ofcom's analysis were published in Annex 5 of the October 2004 Consultation.

2.- 0820 numbers are used for internet services for schools

3.- A document published from time to time under section 56 of the Communications Act 2003

4.- See the Notification setting general conditions under section 45 of the Communications Act 2003, published by the Director General of Telecommunications on 22 July 2003, as amended.

5.- SMP Condition AA11 set out in Part 2 of Schedule 1 to the Notification which is contained in Annex A of the review of the fixed narrowband wholesale exchange line, call origination, conveyance and transit markets published by the Director General Of Telecommunications on 28 November 2003.

6.- PRS: a particular type of Number Translation Service currently provided on the 090 and 091 number ranges

7.- The Condition set out in the Schedule to the Notification under sections 48(1) and 120(5) of the Communications Act 2003, published by the Director General of Telecommunications on 23 December 2003.

8.- Source: The Communications Market 2005, Ofcom, July 2005.

9.- General Condition 14, set out in Part 2 of the Schedule to the Notification setting general conditions under section 45 of the Communications Act 2003, published by the Director General of Telecommunications on 22 July 2003, as amended

10.- This is for 0845 and 087 calls; due to the small sample size for the 0844 number range, it was not possible to estimate the potential detriment for 0844 calls.

11.- Source: Number translation services: Options for the future, an Ofcom consultation, 2004.

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