Ofcom & ICSTIS findings on the development of 118 directory enquiries market

Ofcom and ICSTIS, the regulatory body for premium-rate telephone services, have today published the findings of new research into the liberalised directory enquiries market.

The research examines the accuracy and cost of 118 services and assesses public awareness and attitudes less than a year after the full introduction of competition to the market.

The five key findings are:

1. Some of the consumer benefits foreseen at the point of liberalisation are beginning to emerge.
2. The new market continues to mature and stabilise. The top 30 providers (accounting for at least 95% of the market by volume) are delivering consistently reliable information; 87% of numbers supplied to researchers in response to a realistic profile of enquiries were accurate. By comparison, using a slightly different methodology, an accuracy rate of 62% was measured in a survey conducted in autumn 2003.
3. Competition is beginning to drive down price; half the providers surveyed now charge less than 40p to provide a single number, below the minimum charge for BT's old 192 service.
4. There are signs of a reasonable level of consumer understanding of the services on offer. Public awareness of the introduction of 118 services remains high and a majority of consumers can spontaneously identify at least one directory enquiries number. A third of consumers have selected a main provider to meet their needs; two-thirds who have done so are satisfied with that provider.
5. The evidence indicates that the evolution of the UK market is likely to be similar to that in other countries where directory enquiries services have been liberalised successfully.

On the basis of the evidence, Ofcom has made three conclusions:

1. Immediate regulatory intervention by Ofcom in this important but young market would be premature and disproportionate.
2. However, there is also evidence that many consumers remain unsure about some aspects of the new market. Although it is likely that public understanding will continue to grow as the market matures, Ofcom will continue to monitor development closely. This will include a further benchmarking study in late 2004.
3. The findings indicate important learnings for Ofcom about the best approach to providing neutral and timely information for citizen-consumers where the nature of competition means that the market alone is unlikely to provide such information. Those learnings will be reflected in any such activity in future.

Key Research Outcomes

• 87% of all numbers requested in response to a realistic profile of enquiries were given correctly.
• There was a narrow spread of accuracy between providers; the highest average score was 96% and the lowest 80%.
• 99% of all calls were answered first time.
• Calls were answered by an advisor within an average of 8 seconds; typical call duration was under 1 minute.
• Half the services tested charged less than 40p. The cheapest charged 27p for providing a single number. Half were more expensive, charging up to 65p for a single number.
• There is no direct correlation between a provider's accuracy and its cost. Some of the most accurate services were also the cheapest.
• 85% of UK adults are aware of the replacement of 192 with a range of 118 providers.
• 7 out of 10 UK adults who are aware of the changes are also able spontaneously to state at least one directory enquiries provider.
• 57% of UK adults currently use 118 services.
• 6 out of 10 UK adults aware of the changes to directory services were also aware that pricing structures vary between providers.
• Although the research data demonstrates that half of the largest providers charge less than 40p for providing a single number, 47% of UK adults still believe that all new 118 services are more expensive than the cost of dialling 192.
• 3 out of 10 UK adults have selected a 118 provider to suit their needs. Of those, 64% say they are satisfied with that provider.
• 41% are aware of at least one additional enhanced service (such as classified business searches) introduced by many 118 providers. 36% claim they are likely to use one.

 

The research assessing quality, accuracy and cost was commissioned from MORI.

Researchers made mystery shopping calls to the top 30 directory enquiries providers and made a total of 5,880 requests for numbers. The calls were based on a new real-world weighted model, mixing residential and business requests at a range of levels of difficulty to reflect the actual profile of number requests to 118 providers.

Benchmark costs were derived from the average fee for providing a single telephone number. To ensure consistency across all providers, the cost of innovative new services introduced since the replacement of 192, such as call completion and find-my-nearest, were not included.

Ofcom and ICSTIS also commissioned research from NOP on residential consumer attitudes to the new services. Researchers polled 1,075 adults from varying backgrounds across the UK to assess their understanding and use of 118 services.

Since full market liberalisation in August 2003, most network operators have provided a free recorded announcement on the old 192 and 153 directory enquiry numbers to ensure consumers who misdialled were alerted to the new 118 number range. Given the very high level of consumer awareness demonstrated in the Ofcom and ICSTIS research (also supported by data on patterns of dialling behaviour), Ofcom will allow operators to cease offering this recorded announcement from 20 June 2004.

Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services.

For further details please visit www.ofcom.org.uk.

Ofcom Report