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National Audit Office Press Notice

Directory Enquiries: From 192 to 118

THIS STATEMENT IS NOT FOR PUBLICATION OR BROADCAST BEFORE 00.01 HOURS ON FRIDAY 18 MARCH 2005

Report by the Comptroller and Auditor General
HC 211 2004-2005
18 March 2005
ISBN: 0102932468
Price: £10.75

• Full Report (973 KB)
• Executive Summary  (416 KB)

Sir John Bourn, Head of the National Audit Office, told Parliament today that not all consumers have yet benefited from the move from 192 to 118 directory enquiry numbers, but that the market was still evolving. Specifically,

• the average residential consumer is paying more for a directory enquiries service with no obvious improvement in quality. But there are cheaper numbers available providing an accurate and reliable service;
• there are concerns that public sector organisations are not taking advantage of the opportunities offered by competition;
• callers do now have considerable choice and a range of additional services are available;
• the number of people using directory enquiries has fallen. This is partly due to confusion and perceptions of higher costs (of those using directory enquiries less frequently, one in five consumers wrongly believed that the old 192 service was free) but also as a result of a greater use of alternative sources of information, such as the internet; and
• the actual liberalisation process was handled well by Oftel, following good regulatory practice.

In 2003 Oftel – which has since been subsumed into Ofcom – opened the directory enquiries market to competition and the numbers 192 and 153 were replaced by a choice of over 200 different 118 numbers. Oftel believed that competition would deliver benefits for consumers: an improved quality of service; an increase in price competition; and greater choice of innovative services. The National Audit Office found that:

• Quality of service: in November 2004, 86 per cent of directory enquiry requests received the correct telephone number. 19 of the 30 numbers surveyed provided the correct information to at least 90 per cent of requests. In common with other European countries, Oftel did not collect accuracy data on any of 192 services which means that it is not possible to compare post and pre-liberalisation accuracy;
• Price: there is now significant variation in prices and the majority of callers now pay more than they did for requests using 192, even though the National Audit Office’s analysis found that one quarter of services are cheaper. Service providers are required to publish pricing information in all advertisements for their services but it is not easy for callers to find the best price; and
• Choice: a wide range of directory assistance services are now available, for example call-connection, the number texted to a mobile and cinema listing.

Before deciding to introduce competition, Oftel drew on evidence from a range of sources including the experience of other countries that had already made such changes. This evidence did not indicate a conclusive case on the best approach. In particular, there was scope for Oftel to have conducted a more detailed economic analysis of the characteristics of a competitive market and the extent to which this would deliver benefits for consumers. In the absence of a compelling case to retain the existing arrangements, Oftel decided to proceed with the liberalisation. Having made this decision, Oftel handled the liberalisation project well, following good regulatory practice.

Sir John Bourn said today:

"The outcome of this market liberalisation for the residential caller has been more choice and innovative services but also an increase in average prices and uncertainty over improved quality. I would encourage: Ofcom to maintain an effective competitive market by raising consumer awareness and continuing to ensure a level playing field; individual callers to find out more about the available services and best deal; and businesses to take advantage of the opportunities created by competition."

Notes for Editors:

1. On 29 December 2003 Ofcom took over the duties and responsibilities of Oftel, along with four other communication bodies (the Broadcasting Standards Commission, the Independent Television Commission, the Radiocommunications Agency and the Radio Authority). Ofcom’s aim is to further the interests of citizen-consumers through a regulatory regime which, where appropriate, encourages competition.
2. The designated number range for new directory enquiries services was 118 (XYZ) in line with a recommendation of the European Committee for Telecommunications Regulatory Affairs to enable competition and provide harmonised cross-European services.
3. The publication of the NAO's report coincides with the publication of research by Ofcom and the premium rate services regulator ICSTIS into the performance of the liberalised 118 directory enquiries market. Ofcom's research is also strictly embargoed until 0001 Friday 18 March. For further information contact Ofcom Media Office on 020 7981 3033.
4. Press notices and reports are available from the date of publication on the NAO website, which is now at www.nao.org.uk. Hard copies can be obtained from the Stationery Office on 0845 702 3474.
5. The Comptroller and Auditor General, Sir John Bourn, is the Head of the National Audit Office which employs some 800 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

Press Notice 26/05
All enquiries to Mark Strathdene, NAO Press Office:
Tel: 020 7798 7183
Mobile: 07748 181693