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.