IT Brief New Zealand - Technology news for CIOs & IT decision-makers
Story image
Freephone charges – time for some user power
Sat, 1st Aug 2009
FYI, this story is more than a year old

“Thank you for calling the Bank of New Zealand’s 24 hour telephone banking service. Mobile callers should call 04 ….”“Sorry, this number is not accessible via a mobile phone. Please dial 09…..” (MAXX, Auckland’s transport information service.)“Thank you for calling Inland Revenue. To contact us using a cellular phone please call 04….”Three examples of numbers many of us call routinely. Organisations that we want to call, sometimes, when on the move. 0800 freephone numbers that are advertised nationally. Numbers that its convenient to plug into our mobile contact lists so we can ring them whenever, from wherever we want.But numbers whose owners have made the decision not to accept mobile calls. Why?In a survey of TUANZ members there is one overwhelming reason – cost. While most of the 54 business respondents paid less than 5c per minute to receive calls from landlines on their freephone numbers, the corresponding charge for calls from mobiles was at least three times, and up to six times that amount.That’s right. Nearly half the respondents paid between 20c and 30c a minute to receive calls from mobiles to their freephone numbers!Interestingly 85% of respondents accepted landline calls on their freephone numbers, but only 75% accepted calls from mobiles. And among the 75% were several more who are actively considering withdrawing the facility from mobile callers. They just can’t afford it.One of the great benefits of freephone calls is the ability of an organisation to maintain one universal inbound number and advertise it nationally. That way, customers can store it on their mobiles and ring it whenever they want, from wherever they happen to be. The business, and its customers, are happy.For many businesses, the problem has come to a head because of the popularity of this facility. That means businesses are seeing the ratio of calls from mobiles increase, and the costs increase exponentially.Wouldn’t you expect the mobile carriers to acknowledge these increases in volume by lowering the unit costs? It seems this isn’t happening – or isn’t happening enough.Why not? It seems to me it can be explained by market failure. It’s one of those issues where the party bearing the cost has little or no way to influence the choice of network made by the party imposing it – similar in that sense, to mobile termination charges.Users expect to pay fair prices for all the various services we buy. But in the case of mobile-to-freephone charges, two-thirds of our respondents don’t see the charges as “reasonable”. Several used extreme language.As one very substantial respondent said: “We’ve seen no reduction in freephone pricing for the past five years – in a market where prices are being reduced for almost everything, it’s ridiculous and a rip-off that freephone charges are so high, and mobile to free extortionate.”Sadly, callers don’t get to see the underlying costs. They probably put the blame for the inconvenience on the bank, the university, the government agency or whoever.Ironically, one respondent who doesn’t accept freephone calls from mobiles is a carrier – proving that even the industry isn’t exempt.What needs to be done? The best solution is for the carriers to get the message and voluntarily drop these rates without delay.Meanwhile, TUANZ has raised this issue as part of our submission to the Commerce Commission on mobile termination rates. Whether it’s within scope remains to be seen. But one way or another we are determined to fix it. Our members’ anger about this issue was very apparent at our annual general meeting back in May.There is, of course, another option. If a significant gap were to open between the rates charged among the three mobile operators, then some large users might elect to accept calls from some of these but not others. A message such as “sorry, we do not accept freephone calls from Vodafone mobiles due to cost, please call us from a Telecom or 2 degrees mobile, or a landline” would focus the customer’s mind beautifully. (And I’m not picking on Vodafone; it could equally be any one of the three.)The first mobile operator who can prove a major downward shift in these rates will get a chocolate fish and an accolade from TUANZ. So will the first end user who is innovative enough to discriminate about which mobile operators they accept freephone calls from, and advise their customers of the reason.Maybe it’s time for a bit of user power, with some naming and shaming.