Push to make 0800 numbers truly toll-free might backfire

While a new government regulation looks to make 0800 numbers free of cost for the caller, regardless of the network they use, high interconnect rates being proposed by some networks might actually push businesses away from toll-free numbers, and put the end user at a disadvantage.

Even though telephone numbers starting with 0800 are known as ‘toll-free’ in South Africa, they are not truly free of cost for the caller. It only applies when both the caller and person or company being called are on the same network, and in the local context that means the caller having to use a Telkom landline. Greg de Chasteauneuf, chief technology officer at Saicom takes a look at the impact new regulations will have on businesses’ use of 0800 numbers.

The South African government through the Independent Communications Authority of South Africa (ICASA) is looking to make 0800 numbers truly toll-free, under new regulations put forward in the Government Gazette on 24 March 2016 (No. 39861), with ICASA amending the Numbering Plan Regulations, in terms of Section 68 of the Electronic Communications Act 205 (Act 36 of 2005).

Under this new regulation, toll-free numbers must be such that no charge is incurred by the caller, regardless of the electronic communication service used in originating the communication. The regulation further stipulates that this new toll-free framework needs to be implemented within a period not exceeding six months from the date of the regulations coming into force – in this case, effective 24 September 2016.

“There are a few pertinent questions that this new regulation brings up,” says de Chasteauneuf.

“When a call to an 0800 number is made from another network, an interconnect rate is applied. But if the originating licensee (the network used by the caller) can no longer charge their customer (the caller), how do they get compensated for the cost incurred to route the call over their network?”

The regulations allow for the receiver of toll-free communications (eg. a business) to have a commercial and technical relationship with a terminating licensee of their choice, with whom they can establish an agreed rate-per-minute for the calls which it receives. The terminating licensee will then pay the originating licensee an agreed rate for originating the call.

“This is where concerns arise, with two of the major mobile networks setting the interconnect rate for 0800 numbers at an over 400% premium when compared to the interconnect rate for ‘normal’ phone calls, and we fail to see how this is justified,” he says.

While the new regulations were undoubtedly promulgated in an effort to make things easier for the man on the street, Saicom Voice Services believes it was not fully thought out, and attempts by some networks to profit from this through implementing high interconnect rates might end up causing more harm than good to the end user.

“Such a huge increase in cost cannot be absorbed by terminating licensees, and will have to be passed onto their customers (the businesses wanting to make use of 0800 numbers). In the end, this will most likely result in companies with tighter budgets moving away from toll-free numbers toward other options, including Share Call or omni-channel communications,” says de Chasteauneuf.

By not regulating the cost of 0800 numbers, government is making them unattractive and effectively pushing businesses away from using toll-free numbers. “What started off as an effort to make toll-free truly toll free might backfire on government, and result in fewer toll-free numbers being used by businesses,” concludes de Chasteauneuf.

Graphic source: Government Gazette, 24 March 2016 (No. 39861)

Post written by Greg de Chasteauneuf
Director / CTO
Saicom Voice Services (PTY) LTD


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