What are local call rates and how have they changed over the years?

Back in the day when BT was the only provider of telephone services, there was only one local rate, and that was that. Today, however, different rates for local calls are available, as determined by tariff.

In this posting I explain how it used to be and how it is now.

What is local rate?

“Local rate”, “local call rate” and variants thereof is the price a subscriber pays to ring a landline number in the local area.

What was it like when we all made our calls with BT?

Because everyone made their calls with BT and there was only one pricing tariff, local rate was the same for everyone. At that time, one could therefore refer to the local rate.

There was also the national rate which was greater than the local one.

What was the cost of calling 0845 numbers?

The 0845 numbers existed at that time, and, by regulatory dictate, BT charged the same price as it did for local calls to ring them. This is where the association between 0845 numbers and “local rate” came from; it only ever applied on BT’s old tariff.

How has local rate changed?

Today there are many providers, all charging different rates for local calls. Many landline users have an inclusive package, which means that they pay zero pence per minute for local calls. Alternatively, they are chargeable on a ‘per minute’ basis.

The vast majority of landline subscribers don’t pay more to call landline numbers outside their local call area. Where calls are inclusive, local and national ones are inclusive, and where they’re not, the same ‘per minute’ rate applies to both.

Mobiles, by their very nature, only charge a single rate for calls to landlines, irrespective of distance.

All in all any consumer’s “local rate” is likely to be the same as his or her “national rate”. As such, I usually talk about “geographic rate” as use of the term “local rate” has the tendency to re-enforce the myth that it’s more expensive to call longer distance.

How do 0845 call rates stand now in relation to local calls?

They cost more than local and more than national geographic calls (remember that local and national calls now cost the same on respective tariffs). Mobile users are hit the hardest with charges of up to 41 pence per minute and calls not come from bundled minutes.

Higher 0845 rates are to be expected due to the fact it costs the telephone companies more to connect calls to them than with geographic calls. BT’s call rates are held artificially low by regulation.

The need for 03 numbers

In the days of BT-only telecommunications, 0845 provided companies with a way of having a number that wasn’t associated with any particular location, but which cost no more to call than a local number.

The 03 numbers don’t relate to any geographic area and their call rates are pegged to geographic call charges with all telephone providers. They are suited to the multi-provider market, unlike 0845 numbers which are only linked for customers of BT.

Conclusion

Whilst the continued use of the local rate term is not incorrect, it is important to be mindful that:

• national calls don’t cost more than local ones;
• 084x calls cost more than geographic calls;
• all 03 numbers cost no more than geographic calls on any individual tariff, as dictated by regulation.

Who is responsible for setting the cost of a telephone call?

The ban on phone numbers that cost more to call than geographic or landline numbers within the NHS has had little effect.

One of the biggest reasons for this appears to be the way in which PCTs are taking at face value assurances, given by GPs’ telephone providers, on the cost patients incur when dialling their numbers.

In this posting, I explain, using some simple logical thinking, why these supposed affirmations are in reality totally worthless.

Who is responsible for setting the cost of a telephone call?

Many GPs imply that it is down to their own telephone provider. They cite phone provider assertions that patients pay the same as a geographic or local call.

For this to be the case there would have to be regulation which all telephone call providers must obey. They would all have to be prevented from charging more, but there is no such rule!

The telephone system as a whole allows customers of one telephone provider to ring those of other providers. It also allows the call providers to set call rates independently of one another.

So it follows that it is the caller’s telephone company that sets the call’s price and not the receiver’s.

What about local or geographic call charges?

In the days when we all placed our calls with BT, it charged national calls at a higher rate than local ones. Crucially, as everyone made calls with the same provider, which offered only one tariff, there was only one price for local calls. So it was valid to refer to the local rate.

Also, at that time, 0845 calls were charged by that sole provider at the same rate as it did local calls.

But today, there are many providers offering many tariffs, charging different rates for local calls. So there is now no single local call rate that applies to everyone. Additionally, charges for 0845 calls are generally greater and are therefore no longer aligned to these varying local rates.

Furthermore, with today’s tariffs, in most cases all geographic calls, whether they are local to the caller or national, cost the same on any one particular tariff at any one time.

What about call charges?

We don’t have to look very far for some examples of major providers charging more for 084x calls than local calls. Virgin Media charges just over 10 pence per minute for 0844 g6 and 0845 numbers, yet geographic and 03 calls are inclusive or just below 9 pence per minute.

T-Mobile charges 41 pence per minute to 0844 and 0845 numbers, but geographic and 03 calls are inclusive or up to 30 pence per minute, depending on tariff.

Load of twaddle

To summarise:

• It’s the caller’s provider that sets the cost of the call.
• 0845 calls are no longer charged the same as a local call.
• Calls to 0844 and 0845 numbers are more expensive than local calls.

So the suggestion that a 0844 or 0845 number costs no more than a geographic call is utter twaddle!