The article is extremely pertinent and timely given Thursday’s IRG/ERG press release regarding the creation of BEREC, the election of its officers and secretariat and the decision to locate the body in Brussels. (Acronym apologies.)

Below are two quotes from The National story:

In the UK, when there was little or no competition in broadband service, some business customers preferred sharing what broadband they had by illegally reselling or “pairing” it. The much maligned British Telecom took a lot of flak for this, and rightly so. When Ben Verwaayen joined BT as the chief executive in 2002, he recognised the problem and put broadband at the heart of the company. He even appointed the company’s first chief broadband officer to make it clear to all the staff that this was the organisations number one objective.

When it comes to mobile roaming charges in the UK and Europe, then it is an entirely different story. The operators there have been sluggish and far from benevolent.

A UK-based Vodafone customer travelling anywhere in Europe would pay €0.43 per minute to make a call back home and €0.18 to receive a call, Vodafone’s website said. Similarly an Etisalat mobile customer roaming in Bahrain would pay Dh2.50 (€0.48) to make a call back home and Dh2.18 (€0.42) to receive a call, according to Etisalat’s website. Not much difference.

The reason for this is that in Europe the mobile operators have been running a cosy cartel for as long as anyone can remember. Commercial arrangements and interconnect agreements have been done on a nod and a wink. They have maintained price parity with one another, offered similar service levels and tried not to upset the apple cart. The customer has been the loser.

A couple of reasons are cited in the IRG press release regarding the location of BEREC’s secretariat in Brussels including:

Proximity to the EU Institutions is crucial to the successful operation of BEREC. One of the roles of the Office is to facilitate BEREC’s communication with the EU Institutions, and its co-location with those Institutions is therefore important to enable it to carry out its role fully.

Proximity to BEREC’s Expert Working Groups, which the Office is responsible for helping to set up and support, is also crucial. Brussels has been, and is likely to remain, the preferred location for meetings of BEREC Expert Working Groups, given the need for close co-operation between BEREC and the Commission under the revised Framework and, in particular, under the new market review procedures.

Transparency and Interaction with Stakeholders. The Office will also help ensure that BEREC’s activities are transparent to stakeholders and to help BEREC be responsive to them. Locating the Office in Brussels would make BEREC easily accessible to stakeholder organisations, as well as the many media outlets with European operations, based in Brussels.

In the IRG press release, incoming chair of BEREC, John Doherty said:

“The establishment of BEREC is a significant development in the evolution of electronic communications sector throughout the EU. It will contribute to achieving the goal of a single market for European electronic communications. The creation of BEREC will give national regulators throughout the European Union a formal role at the highest level in the EU to bring about change and reform to the benefit of industry and consumers.

“2010 will be a very challenging year for the electronic communications sector throughout Europe. BEREC will play a full role in ensuring the further development of the EU-wide communications market for the benefit of all consumers and businesses.

“Developments are taking place across a range of markets, with consumers being offered a greater range of services due to changes in technology, growing convergence and enhanced competition. The purpose of BEREC is to ensure the consistent application throughout the EU of the regulatory framework for electronic communications networks and services. As part of its activities during 2010, BEREC will hold a public consultation on its work programme.”

All of which sounds encouraging. Are you detecting a note of cynicism in my voice? I’ve all but given up expecting UK telecoms industry views to be acknowledged, but I sincerely hope that the voice of UK citizen consumer is heard in Brussels because it’s having one hell of a time reaching Southwark Bridge.

You’ve probably detected a little frustration in the posts on this blog. It’s become a bit of a crusade really – this desire for a level playing field for fixed and mobile communications providers.

Unfortunately, more than 25 years since their introduction, 0800 “freephone” numbers are still not free when dialled from most UK mobile network operators. They are excluded from monthly bundled minutes and charged at a much higher rate than calls to 01/02 (geographic) numbers.

I’m thrilled that today Zimo’s Numberstore App has gone live in the iTunes App Store (link at the bottom of this post). The Numberstore App allows you to dial 0800 numbers as part of your network provider’s allowance. If you exceed your bundled minutes, they will be charged at the same rate as calls made to geographic numbers. The App is free to download and there are no charges for using the service. Calls to 0800 numbers are made via your iPhone and charged by your network provider at the same rate as those to geographic numbers. You will not be billed by Numberstore for calls to 0800 numbers.

Calls to freephone number ranges 0808 and 0500 are also supported within the App in exactly the same way.

Numberstore’s simple user interface allows you to dial straight out. There are no tricky IVR menus to navigate to take advantage of these huge cost savings. Numberstore is as simple as using your iPhone.

The next release of the Numberstore App will also allow calls to 0844, 0845 and 0871 numbers at substantially lower rates than those charged by the mobile networks. Follow @gtdab or @numberstore for information about the next release and other Zimo news.

DOWNLOAD THE FREE NUMBERSTORE APP » (iTunes App Store Link)

I am shocked and extremely disappointed to see the following text on your on your website in relation to your 03 contact number:

“Calls cost no more than calls to 01/02 geographic numbers, although calls from mobiles will vary according to your provider.”

Worse still, the text which appears on the TV is even more inaccurate stating “Standard geographic charges apply. Calls from mobiles may be higher.”

Ofcom’s whole rationale for introduction of 03 numbers is clear and extremely simple:

Calls to 03 numbers cost no more than a national rate call to an 01 or 02 number and must count towards any inclusive minutes in the same way as 01 and 02 calls.

These rules apply to calls from any type of line including mobile, BT, other fixed line or payphone.

http://www.ofcom.org.uk/media/features/03numbers

The BBC’s wholly inaccurate description of 0844 numbers as “Premium Rate” earlier in the year has had a dramatic effect on the supply of numbers, whose reputation had already been tarnished by the rapacious pricing policies of UK mobile network operators.

One result of its inability to effectively regulate the mobile sector’s unjustified additional charges for calls to 08 numbers (including 0800 “freephone”) was the introduction of 03 numbers which specifically disallow such pricing and oblige every Communications Provider to charge no more than the cost of a geographic call – irrespective of the network the caller is using.

Your reach and power to misinform the public and destroy a nascent market cannot be overstated.

The irresponsibility and incompetence is unacceptable and calls into question the rigour of your research and the reliability of stories reported on your programme.

This is basic stuff and the fact that you got it 100% wrong is deeply concerning.

Yours sincerely

Kieron James

So this week, I’m delighted that Zimo is launching 03TALK – the UK’s first mobile-friendly conferencing service. We’re live so you can visit the site to set up an instant conference or call 0330 330 0330 and choose Option 2 if you prefer to do so over the phone.

Hooray!

Just like calls to UK area code numbers, those beginning with 01 and 02 are charged at standard geographic rates and most importantly must be included in fixed and mobile network operators’ bundles. So, if you have inclusive minutes with your contract, conference calls made to 03TALK will be included in those minutes and not charged at an exorbitant rate by the networks!

Zimo’s developers are now busy working on lots of exciting features, such as recurring conferences, notification via SMS, email, Twitter and IM, conference recording and permanent room numbers.

To use the 03TALK service, just visit 03TALK.com or call 0330 330 0330.

From a consumer perspective, there can only be one outcome of such considerations. Surely.

The level of confusion and ambiguity in PRS regulation – particularly pricing – is preposterous. Other than from a BT landline (18.7% of UK fixed/mobile connections), pricing is anything but transparent in the fixed line sector and it’s a simple case of “expect the worst and hope for the best” for callers using mobile devices. Does Ofcom seriously believe that “calls from mobiles will cost considerably more” has any meaning at all?

As Ofcom notes:

…the increase in the number of operators has led to an increase in the number of tariffs for calls to the same PRS service. In addition, with the exception of mobile shortcodes, only BT’s exact tariff for a call to a PRS is typically stated in advertising material. As BT’s share of the market has declined, fewer consumers will know the exact price of a PRS from the advertisement, and at the same time, because of the increase in the number of OCPs, there is a greater variability in tariffs of calls to the same PRS from different OCPs. We therefore consider price transparency has decreased over time.

As with calls to 0800 “freephone” numbers, I would have no hesitation in adding “dramatically” to the final sentence. This is reinforced by PPP’s research (also quoted in the PRS Scope Review):

Furthermore, according to a study commissioned by PhonepayPlus, on average, more than half of consumers say they have no trust at all or low trust in any given phone-paid service, and for most phone-paid services, between 15% and 25% of those not using the service state that lack of trust is one of the reasons for this.”

By allowing mobile networks to vary pricing so significantly (with no technical justification whatsoever) Ofcom appears to be shirking one of its principal duties:

It is important to ensure that PRS regulation (as applied through the definition of Controlled PRS) continues to capture those categories of PRS that are likely to give rise to risks of consumer harm that would not be adequately covered by alternative means of protection.

Where, oh where is the “alternative means of protection” for mobile users? To conclude that the “current regulatory regime is functioning well…” seems a bit of a leap to say the least.

I know at Zimo we would support a PhonepayPlus mandatory registration scheme for Service Providers and Information Providers. But we would also like PPP to be much clearer in the guidance it provides to SPs, OCPs, TCPs and IPs. All too frequently when opinions and advice have been sought by my team, answers have been as clear as “considerably more from mobiles”.

Most importantly (my recurring theme), if the PRS Condition considers that calls which cost more than 10p per minute (or 5p in the case of calls made from a BT landline to certain 0871 numbers) have “potential to cause consumer harm that may not be adequately addressed by more generic consumer protection regulation,” how can mobile networks be allowed to get away with charges in excess of £1.00 per minute (no forced release, i.e. uncapped) to 087 numbers. How much harm can be done from that?

From a personal view, the timing could not be better – and yes, I do suspect that this post will end up sounding like another rant about the unregulated mobile sector and the dubious business practices they are allowed to get away with.

The Background

For her 15th birthday, my daughter received a BlackBerry. Like most families with teenage children, we’re a multi-handset family with a non-trivial monthly spend with O2. Given the cost of unbundled minutes and SMS charges, data and roaming fees, the children are indoctrinated with an “inclusive minutes only” policy. From their mobile devices, they will only browse the web or use data applications whilst they have access to the home WiFi connection. Roaming is switched off and they are briefed to check remaining minutes and text allowances at regular intervals. The reason we are obsessive is because, like so many other parents, we have been bitten badly in the past when our children have exceeded contracted minutes and allowances.

On Wednesday this week, during a business meeting at which we were discussing the reputation damage which the UK mobile sector was inflicting upon the rest of the telecoms sector, I received a text message from my wife telling me that my daughter had incurred £115 of data charges over the last three weeks. How could this be? The BlackBerry had been configured to access the home WiFi right out of the box. She had been fully briefed and I trusted her to understand and respect what she had been told.

On closer examination it seems that whilst the BlackBerry has been set up to access the WiFi network, it defaults to O2′s mobile network for data transfer even when the WiFi network is within range and functioning correctly. Call me cynical.

“Not to worry,” I said. “We’re a valued customer. They will read my customer service notes and understand the issues we’ve had with iPhone call dropping because of O2′s inadequate network (their admission of the problems and recommendation that if I wanted my phone to handle calls correctly, I should disable 3G). They will then refund this charge and ensure that the handset defaults to the cheapest network.”

How wrong could I be? Three calls later (a total of 73 minutes to extremely unsympathetic and unhelpful customer support staff) I am still awaiting a call back from a BlackBerry “specialist”, despite this being promised before 9pm last night. O2 has refused to refund the data charges and refused to allow me to cancel the contract.

It is not in my interests to buy my way out of the various contracts we have, but if the mobile networks had made us obsessive before, we are now “on a mission” to bring this level of intransigence to the attention of as many people as possible and to ensure that O2 receives not a penny more than my minimum contractual commitment. Four PAC codes will be requested to guarantee that service is migrated to another provider at the earliest opportunity.

Am I alone? Are they bovvered?

No. And no. Based on consultation, research and evidence gathering, Consumer Focus has identified a set of priority issues that will be the focus of its campaigning and advocacy on behalf of consumers in the mobile phone sector for the next six months. These are some of the issues raised in the report’s Executive Summary:

Mobile phone tariffs and billing

Widespread concern around mobile phone tariffs and billing has been identified by Consumer Focus. Complexity and poor transparency around prices are a
significant source of consumer dissatisfaction, while concerns around the cost of calling special-rate numbers from mobile phones are also common.

Mobile network operators’ quality of service

Consumer Focus uncovered consumer dissatisfaction with mobile network operators’ quality of service, particularly in relation to customer service and
complaint handling. Consumer Focus believes consumers should have access to independent, comparative information on mobile network operators’ quality of
service.

Mobile network coverage

Consumers consulted by Consumer Focus raised poor mobile network coverage as an issue of concern more often than any other. Consumer Focus
will support the Communications Consumer Panel in addressing the impact of ‘not-spots’ and ensuring consumers are fully informed about coverage when
choosing a mobile phone.

Here are some more worrying trends and observations from the report:

“The 2009 Consumer Conditions Survey, which rated a range of services against a Consumer Confidence Index (CCI) to measure market conditions for consumers, ranked mobile services in the lowest category of CCI rating, indicating a lack of general consumer confidence and transparency in the market. Alongside this, data from the Government helpline Consumer Direct shows that more than 100,000 complaints have been received about mobile phone service agreements and hardware in 2007 and 2008.”

“Mobile consumers face a complex marketplace in which multiple operators offer a huge range of changing tariffs containing varying allocations of voice minutes, text messages and data allowances. Mobile price comparison website BillMonitor currently compares 1.3m mobile deals, based on 84,000 separate mobile tariffs and 200 bundles, while additional ‘hidden’ charges further complicate price comparisons.”

“67 per cent of respondents agreed that there are too many mobile tariffs in the marketplace.”

“79 per cent believed they should be able to access essential services from a mobile at the same rate as from a landline.”

“47 per cent were unsure whether or not they would be charged for calling 0800 numbers from a mobile.”

“Many special-rate numbers, including 0800 and 0845 numbers, were originally established to offer free or non-location specific calls to essential public services,
charities or helplines. With the growth of mobile phone use, however, consumers can now incur considerably higher costs for calling these numbers from mobiles than they would from using a landline. Consumer Focus is concerned that in many cases, particularly where helplines provide essential public services, the level of these charges may be unjustified.”

“…concerns are mirrored by Ofcom in responses to the first phase of its Mobile Sector Assessment consultation. According to Ofcom, respondents highlighted that there is ‘a general feeling that customer service standards are poor’ and ‘a general mistrust of service providers’.”

According O2 -and as reported in The Guardian – the delays had nothing to do with its policies. An O2 spokesperson told Guardian Technology “We have no problem with the app at all… We didn’t hold it up.”

If that is the case (and there appears to be more evidence given yesterday’s Vonage press release which very importantly states that international IP calls may be made over cellular networks as well as WiFi) this can only be good news for innovation, choice and ultimately the customer’s pocket.

There is little doubt that MNOs have a huge amount to lose in terms of short/medium term revenues by allowing IP calls to be made over their lucrative GSM networks. However small, these are bold steps and although restricting IP over GSM to international calls is intended to minimise revenue loss, it is still a step in the right direction.

Reporting on this release (copied below for convenience) from the UK Department of Health, the BBC’s inaccuracies prompted me to email the telecoms industry representative body, the Federation of Communication Services (FCS).

NHS to ban use of premium rate call charges

The use of phone numbers that charge the public or patients a premium rate to contact the NHS are to be banned in England, Health Minister Mike O’Brien announced today.

The announcement follows a recent public consultation on the use of 084 numbers in the NHS. Almost 3,000 members of the public responded, demonstrating the strength of feeling on this issue.

Health Minister Mike O’Brien said:

‘We have been concerned that some people are paying more than the cost of a local call rate to contact the NHS. It is clear from the feedback we have received that patients support the banning of any number or tariff which is more expensive to call.

‘For people on low incomes, and for those who need to contact their local doctor or hospital regularly, these costs can soon build up. We want to reassure the public that when they contact their local GP or hospital, the cost of their call will be no more expensive than if they had dialled a normal landline number.’

The Department of Health will work with the British Medical Association’s GP Committee over the coming months to integrate the legislative changes into the GP contracts.

It seems the error is not something which Ofcom is too concerned about. When the regulator was informed of the Department of Health’s errors, the response received by the FCS was:

“Thanks for pointing this out – we will raise it with them. The use of the term ‘premium rate’ seems to only have been used in the media release (as opposed to the consultation) as a catch-all for any non-geographic number. Not ideal, but I don’t think it would have confused many of their stakeholders.”

Unfortunately mud sticks. I won’t use this post to describe the many benefits offered by non geographic numbers: intelligent call routing, crisis management, geographic call distribution, etc. etc.

Nor will I dwell on the fact that the outrage caused by 08 numbers almost always results from abuses by most mobile network operators (MNOs) and the premiums (I use the word in a literal sense) which they levy on calls to all 08 numbers (including 0800 freephone numbers). It’s a drum I’ve been banging for, oh around 4 years now.

I would however like to correct The Daily Mail when it states:

Two years ago, ministers issued further guidance, saying GPs should charge no more than a local rate of 3.25p a minute, although 084 numbers cost 5p a minute from a BT landline.

0844 calls are charged at rates varying from 1p to 5p per minute from a BT landline depending upon the particular 0844 range being called. 0845 numbers cost 2p per minute from a BT landline.

For iPhone / O2 customers, this has to be good news. We’ve been paying a premium for two years (the inevitability of a monopoly position undoubtedly) and a little competition will certainly stir things up.

The upgrade path for those wishing to move to the new 3GS was prohibitively priced and O2′s data network looks to have struggled with the strain which iPhone customers have placed upon it.

Despite Orange claiming to have the biggest 3G coverage in the UK (though this doesn’t seem to be reflected in Ofcom’s recently published maps, which appear to illustrate Hutchison 3G showing greater coverage), I will be unable to threaten O2 with a switch to Orange as coverage is so poor at my postcode. That said, I anticipate some aggressive switching campaigns from Orange at the launch of its iPhone offering and O2 will be forced to respond.

At this point, Orange has only uploaded a register your interest page at its website. I would be interested to know how many hits that page receives over the next few weeks.

Since 2005, mobile penetration has exceeded 100%. For almost five years, we’ve boasted more mobiles than people in the UK.

Customer acquisition is expensive – even when a market is not completely saturated. With virtually no access to brand new customers but some very juicy carrots in the form of existing mobile users (long contracts, recurring revenues, highly lucrative network minutes, exorbitant roaming tariffs, freedom from regulation to extort more than £1,000 per Mb for SMS traffic, etc, etc), the battle for mobile “switchers” has become intense.

Turn on the TV and you’ll see advertisements aimed squarely at affluent teens (those scarce new customers). Open a magazine for ads targeting switchers. And whilst I’m on the subject, why are mobile ads so homogeneous? I mean you can tell instantly it’s a mobile ad. But you’d be hard pushed to say which operator. Maybe the networks are all using the same creative agency. (Tesco’s September 2009 TV campaign is so refreshing and illustrates exactly what I mean.) The whole thing reminds me of 1980s fashion retail. In those days, you had to step back on to the high street and check the name above the shop window before you wrote your cheque. Merchandise was identical because the stores belonged to exactly the same chain.

Not so in the UK mobile industry. No monopolies here. It seems that Ofcom believes the lack of Significant Market Power (SMP) is a good indication of a well functioning mobile market. Five companies battling it out for a handful of new customers, desperate to entice us with the latest handsets boasting cameras, MP3 players, unlimited access to rich content through innovative applications… It should be a pretty favourable environment for UK citizen consumers. So why doesn’t it feel that way?

It’s true that the Mobile Network Operators (MNOs) are fighting tooth and nail over us. And once on board they’ll do everything possible to retain us. Need proof? Phone your network and ask for a PAC code (it’s a technique employed by many looking to upgrade to the latest handset).

If you do decide to move, it’s no walk in the park. The donor network will try its darndest to make things as difficult as possible for you and the recipient network. Coincidentally, as I’m writing this post, my first “pop-under HTML ad” in a few weeks has appeared. It’s one for Hutchison 3G, offering:

“…free Skype calls forever, unlimited texts, unlimited on-net calls, unlimited emails and internet, a Sony Ericsson C903 with integrated Facebook and a 5 megapixel camera.”

That’s got to be worth a click. You never know, I might even switch myself. But hang on. What about my three hundred contacts? How am I going to let them all know my new number? It’d be much easier if I just keep the one I have.

Switching would be a picnic for the networks if we we’d only let go of the telephone number to which we’ve become so attached. Porting numbers is a challenge. Its a process devised by the same irritation committee responsible for broadband switching, changing electricity supplier or (heaven forbid) moving to a new bank. I mean, what could possibly go wrong?

A perfect opportunity for our caped-crusader? Generate some happy column inches and save everybody a lot of pain. You’d guess, but Ofcom could have made several omelettes from the egg scraped off its face last time it attempted to improve mobile porting. Amongst other things, the regulator was criticised for an unrealistic implementation schedule, inadequate consultation and a lack of technical rigour. Unsurprisingly, the regulator was swiftly out-manouvered by Vodafone.

As I write this, we’re four weeks away from the closing date on two important consultations. I sense history repeating itself:

• Routing calls to ported telephone numbers
• Mobile Number Portability – Review of the porting process

Part of Ofcom’s Executive Summary (p3, Routing calls to ported telephone numbers) states:

1.7 We are considering the current arrangements for routing calls to ported numbers afresh following Vodafone’s successful appeal against our decision in November 2007, which required that operators route calls directly to the network serving the subscriber (that is, to the network to which the number has been ported – termed ‘direct routing’).

1.8 We consider that direct routing of mobile-to-mobile calls is likely to serve subscribers’ interests by improving efficiency and ultimately reducing prices through saving costs that would otherwise be incurred by the mobile industry. We are not making any proposals at this time about the routing of calls to ported numbers from or to fixed networks. Our assessment suggests that the costs of making such changes involving the fixed networks are likely to outweigh the benefits.

1.9 The inefficiency caused by onward routing costs around £14m per year now and could rise to around £19m per year by 2021 of mobile-to-mobile calls is likely to serve subscribers’ interests by improving efficiency and ultimately reducing prices through saving costs that would otherwise be incurred by the mobile industry. We are not making any proposals at this time about the routing of calls to ported numbers from or to fixed networks. Our assessment suggests that the costs of making such changes involving the fixed networks are likely to outweigh the benefits. We estimate the benefits of a move to direct routing for mobile-to-mobile calls to ported numbers (only) at £26m.

Ofcom has its heart set upon a porting process which takes as little as two hours. I simply don’t get it. Like everybody else, I want the process to be trouble free, but that doesn’t mean it has to be instantaneous. We’re not talking about removal of service whilst the port is underway. So if I can still make and receive calls, in fact use my phone just as I always do, surely I can wait a day or two for the new handset I’ve been craving? If I’m porting because of poor network coverage, a bad customer service experience or because I’ll receive better value for money on a different network, 48 hours is no biggie.

Ofcom’s original two hour porting model should have been in place this month. But Vodafone was successful in its Competition Appeals Tribunal (CAT) – stopping the regulator in its tracks last year. Ofcom’s “failure to carry out its consultation transparently and effectively” was the regulator’s undoing (hmm, sounds familiar – 07 personal numbers, 0870 NTS services…). Vodafone argued that Ofcom had not provided a proper technical specification. Ofcom’s research had established that the cost of speeding up number porting would be around £5m. Vodafone insisted that the cost would be in excess of £180m.

With Vodafone’s appeal upheld by the CAT, Ofcom headed back to Southwark Bridge, tail between its legs. Fast forward twelve months and it looks like the regulator may not have sharpened its pencils.

Look again at point 1.9 above, particularly the last line:

We estimate the benefits of a move to direct routing for mobile-to-mobile calls to ported numbers (only) at £26m.

These efficiency benefits are at the centre of Ofcom’s consultation. And so they should be. After all, £26m is a lot of money, isn’t it?

Based on the first paragraph of this article let’s assume there are around 65 million connected mobile phones in the UK. The £26m quoted above represents an efficiency saving over ten years – £2.6m per year. Let’s also assume that the mobile operators pass all of Ofcom’s estimated efficiency benefits to their customers [scoff].

Hold your breath now. If my calculations are correct, the saving per year, per mobile phone is [drumroll] four pence. There’s a figure which is sure to impress the CAT at the next appeal. 4p.

[Oh heck! I've just used my mobile to dial an 0800 freephone number and blown my 4p (and the rest). But that's a different post, for another day.]