Amongst the many new telephone services introduced after privatisation of the phone industry by Mrs Thatcher in the UK were PAY-PER-CALL services – which in the U.K. are known as Premium Rate Services.
These are incoming only services. Callers dial an 090 number and either listen to recorded messages or are connected to live operators. The people who provide these services on the premium rate lines are called Information Providers , or Information Providers (I.P.).
Information Providers (I.P.), when offering services via premium rate are allowed to charge a fee in excess of the standard telephone call charge to cover the cost of operating the service.
When a caller dials a premium rate number they are charged at a higher rate, which can vary from as little as 10p to as much as £1.50 for each minute they use the service.
The telephone company bills callers on behalf of the Information Provider; retaining a percentage of the call charges collected and pay the balance to the Information Provider. Charges for calls made to premium rate numbers appear as part of the customers phone bill.
Guaranteed Payment
The great advantage of this business is that the Telephone Company is responsible for billing and collecting the money from the customers who call the IP’s services. The IP provides and promotes the service, and after the end of each month receives payment from the Telecom for their percentage of the revenue generated in the previous month.
In its simplest form, the premium rate service provides a simple, efficient billing mechanism. One which allows the Information Provider (I.P.) to sell their service to hundreds, thousands, or even millions of customers, without the need to arrange billing or collect payment. For the Information Provider (I.P.), nothing could be easier, no billing, no collections, and best of all no bad debts!
Explosive Growth From Innovative Services
The explosive growth of this industry has been the IP’s ability to successfully identify and promote services over the telephone which attract the public. Nevertheless, the Information Provider (I.P.) would never have been able to earn sufficient profit from such services had he also been required to bill, and collect, the money from the thousands, or even millions, of people who call his service.
The Premium Rate billing facility provided by the telecoms has made it possible for I.P.s to sell services cost-effectively over the telephone.