Ofcom number charging scheme may hurt small VoIP providers
Moves by Ofcom to make number porting and availability more effecient has the potential to reduce the level of competition in the UK, by making it harder for the smaller VoIP and telephone providers to compete against the larger operators. The move which has been building for some time, but started with charges being levied on 1st April is a pilot scheme that will see 10p per number per year charged to telephone companies, and with the smallest number block being 1,000 numbers, the pilot is only implementing the charging in 30 area codes initially.
The charges look small almost irrelevant, but as Adrian Kennard highlights in his blog on this issue, with around 650 codes to be able to offer all UK area codes, the outlay would be £65,000 per year if the pilot is extended to the whole UK. Importantly, this is before you even have any paying customers and the cost is not for numbers in actual use, but for the telco just owning the number block, so if they have 10 customers or 10,000 the cost is the same. Prior to this pilot the blocks were free.
While there is a need to encourage providers to not hold onto number blocks unnecessarily, the ability for small operators to embark on the VoIP route and offer innovative solutions may be limited by this charging model.