Consumers see few benefits from 192 deregulation

Friday, 18 March 2005 12:00 AM

UK consumers are paying more for calls to directory inquiries since deregulation, without receiving any noticeable improvements in service.

That is the conclusion of a new report from the National Audit Office (NAO), which also notes that the number of people using directory inquiries has fallen since the 118 numbers were introduced.

"This is partly due to confusion and perceptions of higher costs," the NAO said, adding: "but also as a result of a greater use of alternative sources of information, such as the internet."

In August 2003 the UK telecoms regulator opened up the directory enquiries market to new firms, with the goal of increasing competition and thereby reducing costs and increasing quality for consumers.

But despite more than 200 directory enquiry companies taking up the challenge, two companies dominate the market. BT (118 500) and The Number (118 118) receive 80 per cent of the business, charging 51 pence and 56 pence respectively from a BT line, NAO said.

BT charged around 40 pence for two requests on the old 192 service.

However, there are bargains to be had as a quarter of the new firms are charging less than BT did for the old 192 service, while providing reliable information.

Sir John Bourn, head of the NAO, 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."

A separate survey from the telecommunications regulator Ofcom also found that consumers are unimpressed with the changes, with seventy per cent of those using the 118 services finding them confusing and only one in ten believing the service is better than 192.

Ofcom has accepted that there are lessons to be learnt for any future liberalisation of the market - particularly in providing customers with better information.

Brian Cotter, Liberal Democrat trade and industry spokesman said that the report showed that the process of deregulation had been bungled.

Mr Cotter, said: "Despite having a wider range of directory enquiry services available to them, callers now face a plethora of baffling pricing structures, with over 100 different 118 providers now in the market.

"The National Audit Office may say that Oftel handled the liberalisation of directory enquiries well, but callers are still waiting on the line to benefit from the choice deregulation was supposed to bring them."

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