News
16/11/2007 - Directory inquiries service dials up a loss
Britain’s largest provider of directory inquiry services — 118 118 — racked up a £900,000 loss last year as consumers opted for cheaper methods of finding telephone numbers.
New accounts for The Number UK, which operates the service, show that in its third full year of trading 118 118 made a loss of £895,000.
The group, which operates services in six markets, including France and Italy, said that the loss reflected its decision to reinvest in the business, develop its brand and build up a presence across Europe. It has also invested in ensuring a high accuracy level.
However, the figures come amid growing evidence that the move by Oftel, the former telephone regulator, to open up the £300 million directories market has failed to fulfil expectations.
The British directory market was opened up in 2002 with the scrapping of the old BT “192” number. Companies scrambled to profit from the new market, offering services under a six-figure number with the 118 prefix. Oftel said that the increased competition would benefit customers by driving down prices. However, customer complaints about the accuracy of numbers and the cost of services abounded. Customers were charged up to £2 for a number from some services.
The market is now dominated by just two players — 118 118 and 118 500 — which have 80 per cent of the market between them. Research last year by Ofcom, the new telecoms watchdog, revealed a fall in reported use of the new services. Many consumers blamed the cost. According to the study, more than two thirds of British adults use the phone book rather than directory inquiries, with others using free internet services. More than a third of adults said that they called directory services less frequently since 118 services started.
The average call cost, Ofcom found, had also climbed by 4p from November 2004, to 54p. The legacy 192 service cost 40p from a BT landline.
In December 118 118 — best known for television commercials featuring mustachioed characters — responded to customer concerns about price and launched a free service on an 0800 number. Inquiries to the number from landlines are handled by an automated service. Users of mobile phones are still charged by their network. It now also offers a “mid-price” option that matches the cost of the discontinued 192 service. The group said at that time that it hoped the number would bring people back to directory inquiry services.
In its accounts for the year to December 2006, The Number, which is based in Cardiff, said: “The profit and loss for 2006 demonstrates the company’s commitment to reinvestment.” The Number is part of InfonXX, a global directories provider.
http://business.timesonline.co.uk/tol/business/industry_sectors/telecoms/article2859387.ece
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