News - "New higher tariffs. Higher payments?"
New higher tariffs. Higher payments? Posted 2 Jul 2015 17:21:26
By now, everyone should be aware of the large set of tariff changes that are being introduced on July the 1st. An immediate effect of the distinction of Access and Service charges is that the basic tariffs in some cases seem to be have gone up considerably.
An example of that would be an 0871 range which was billed in June at 10 pence per minute from a BT landline (G7 tariff) and changed then changed in July to 13 pence per minute (SC0014 tariff).
Clearly there is a visible 3p increase on the tariff change, so there must be an uplift on the interconnect revenue. Really? – Not quite!
Lets walk through it:
The pre July 1st 10ppm rate did not include the connection charge, billable per call, nor the BT call package charges applicable as per contract.
The post July 1st rates do away with all the hidden costs and scrap the one off connection charge in favour of the open and defined per minute access charges.
How does that affect the interconnect revenue on existing tariffs?
In the case of Non Geographical Numbers (NGN's), looking at the peak, off-peak and weekend as a whole, the interconnect actually decreases meaning that terminating carriers will effectively collect less revenue and will therefore have less revenue on the pot to share.
On top of that, prior July the 1st, the transit charges were paid by the originator. After July the 1st the transit is now being charged to the terminator, ie the network operator receiving the call thus further reducing the revenue collected.
Detailed explanation on the pre July 1st NTS formula can be found from OFCOM here:
Does this also affect Premium Rate Services (PRS)?
Most likely not. The calculation of the BT formula is not quite the same as with NGN's. This will result in a slight uplift in some cases. Please contact your account manager for further details.
Article by AP. 2/07/2015.
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