INDUSTRY INSIGHTS

Industry Insight : Directory Services and Intra-EU Price Caps

 directory services and intra-eu price caps

December 21, 2018

Communications watchdog Ofcom recently announced that it will be clamping down on charges for directory enquiry (DQ) services as of April 2019.

The new regulations aim to standardise charges for calling DQ (118) numbers which have rapidly increased in recent years.

Charges for calling the most well known DQ line ‘118 118’ have risen four-fold for a one-minute call since Q4 2012, to the point that It now costs £8.98 for any call up to one minute in length.

However, they are far from the worst in this situation, with some other providers charging up to £20 for a mere two minute call.

Why is This Concerning to Ofcom?

It could be argued that callers know what they are letting themselves in for when they call a DQ number. But with prices for DQ services often unclear to callers through a lack of concise pricing guidelines available, many callers are receiving shock bills due to the unexpectedly high rates.

It has also been reported that people aged 65 and over are four times more likely to call 118 numbers than those aged 16-34, making the potentially vulnerable elderly generation increasingly open to high charges.

 directory services and intra-eu price caps

What Action Has Ofcom Taken?

In May 2017, Ofcom opened a Call Cost review to examine the rising cost of calling DQ services to ensure that prices are fair and transparent for consumers.

Since then, they have reached the conclusion that a price cap on the amounts DQ providers can charge is necessary in order to protect callers to DQ numbers.

The new cap restricts the charge to a maximum of £3.65 (inclusive of VAT) per 90 seconds.

This will come into action by the 1st of April 2019, by which point every owner of a DQ number should have adjusted their billing to meet the new cap.

Failing to do so will result in penalisation from Ofcom.

 

Intra-EU Price Caps

The United Kingdom is set to leave the EU on the 29th March 2019. As a part of the Withdrawal Agreement, there will be a time-limited Implementation Period. During the Implementation Period, EU law will continue to apply in the UK.

This note concerns amendments to Regulation (EU) 2015/2120 which introduced new EU rules on retail price caps for intra-EU communications (fixed and mobile calls and SMS). They are due to apply from 15 May 2019.

As of 15 May 2019, callers should be charged no more than €0.19 (+VAT)2 per minute for calls made (including any connection charge) and €0.06 (+VAT) for SMS sent from the UK to any fixed or mobile number in an EU Member State.

This tariff must be applied to all intra EU services both fixed and mobile, unless an alternative tariff is agreed upon. Before consumers choose an alternative tariff, the service provider must inform them of the advantages which would thereby be lost.

For more information on Intra- EU Price Caps, head to Ofcom’s official statement.

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