Cutting Room: Operators have to innovate to survive


With Three becoming the first network to make calls to 0800 numbers free, Paul Withers argues the networks must come up with additional services to stop revenues declining further

You have to applaud Three for becoming the first operator to make calls to 0800 free to new contract customers.

It has also introduced a new service to allow customers to set specific calling and charge limits to ensure they don’t overspend on their deals. Bill shock is a major issue among consumers and Three is responding.

A YouGov survey of 2,018 adults found that almost half (47 per cent) are affected by it, whilst a tenth didn’t even realise they were being charged for 0800, 0808 and 0500 numbers. Almost a third (31 per cent) blamed charges for these numbers for their higher bills.

To add to the idea of being the most transparent network, Three has made it possible for customers to use the allowances afforded to them in their contracts in 11 countries.

Three has continued to try to make itself out as the best value network by making 4G available at no extra cost, even if EE chief executive Olaf Swantee has accused the operator of devaluing the market by implementing this.

You also have to feel a bit of sympathy for all of the operators, as making calls free to 0800 numbers is the latest example of money being taken out of the industry.

Last December, EE, Vodafone, Three and Virgin Media all signed an agreement with the UK government that will see them cap bills on stolen mobiles, agree to protect customers from mid-contract price rises by giving them the right to exit their contract without penalty and eliminate roaming charges by 2016.

All these will contribute to hitting financial bottom lines when declining revenues, particularly in voice usage, are already proving to be a problem for them.

Fair play to Three for adhering to all of this, but in no way should it be seen as a consumer champion.

When Three launched in March 2003 as the most recent operator to enter the market, why didn’t it take the lead then to not charge for calls to 0800 numbers?

Yes it’s great that Three has added this now, but its rivals don’t have to follow suit for another 15 months under an ruling from Ofcom made in December.

Why has it taken the industry such a long time to introduce this? Surely in a technological age where so much noise has been made about 4G and its amazing benefits, something as simple as not charging for making calls to 0800 numbers should have come in first.

There is also a strong argument that calls to so-called free phone numbers should have been free in the first place. After all, the industry is 30 years old and it seems ludicrous that it has taken so long, especially when these aren’t really classed as official charges.

In the three years I was at university in Southampton, I never once owned a landline. Budgets were tight so I kept a close eye on my mobile charges. To make a call to an 0800 number, I would have to find the nearest phone box and proceed from there.

Times have never been tougher for the operators. Rulings are sucking money from them so they have to find value-added services. O2 has its Priority set of services, while Vodafone is offering Sky Sports Mobile and Spotify to 4G customers.

It’s important that with the millions of pounds being spent on upgrading networks to cater for 4G and cope with the increased data traffic, enough money is kept aside to continue to innovate in this digital world, or else they could find themselves fighting a losing battle.