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,Jump to downloads
- 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.
"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."Sir John Bourn
- ISBN: 102932468 [Buy a hard copy of this report]
- HC: 211 2004-2005