Watchdog to investigate 'cheaper' 118 calls

While BT and The Number both claim market leadership

The National Audit Office is to investigate Ofcom predecessor Oftel's introduction of directory enquiry competition to see if customers are getting a good deal.

In the meantime, BT and The Number are engaging in a slanging match over which takes the majority of calls.

The one fact that we do know is that there are fewer providers. The number of directory-enquiry queries has dropped by three million a week since Oftel scrapped BT's 192 service. This was supposed to improve service and cut costs to consumers by introducing competition.

But with over 100 operators offering 118 services, the customers have wound up mostly just being confused. And many of them have just stopped using it, according to Ofcom figures released in June.

The media has made much of customers' difficulties in dealing with offshore call centres in India, South Africa and the Philippines.

BT threw down the gauntlet by issuing a statement saying that it "believed" that it is the leading supplier as well as claiming to be cheaper and more accurate than its "only significant rival". And the statement shows how deeply the company regrets the loss of its monopoly.

Paul Elliot, chief executive of BT Directories, said in a statement issued today: "Oftel's withdrawal of 192 was extremely unpopular with customers. The restrictions on how we communicated the change to 192 callers led to confusion and we saw a huge drop in call volumes."

But he went on to say: "People are realising that BT's 192 service never really disappeared – it was simply transformed into our 118 500 service."

The Number communications director William Ostrom is having none of this. He said: "They say that this is based on market research and we can't see how they got these results. If BT will release their figures, we will release ours. But we are the market leader."

However, he did welcome the inquiry and criticised the way that the transition was handled.

He said: "There was no overall government campaign to inform people and they did become confused. Before the changeover we lobbied against allocation of any of the 'golden numbers' - variations on 118 - because it would create such an unfair competitive advantage. But we lost, so we paid £2m for 118 118.

"Other markets are planning to deregulate, like France, Italy and the US and we think that the lessons should be made available to them."

BT spokesman Les King said: "There was lots of confusion that could have been avoided. The handover could have been handled more smoothly and with less confusion. At the end people were confused about what number to call and what they would get in return. Many didn't realise that they were paying for the 192 number."

BT is claiming 93 per cent accuracy on its 118 calls and says that it believes that it has already improved on this figure.

The National Audit Office will make its report to the Public Accounts Committee later this year.