InternationalTelecommunications International Calling for Free

Hampered by implementation delays, toll-free calling is yet to fulfill its international potential.

Judith Oppenheimer

In the computer industry, international freephone services (global 800) might be described as the next killer application. By all accounts, these services, which will provide businesses everywhere with one 800-number for global use, are now imminent. In reality of course, it will not be this easy. The telecoms industry faces the formidable task of explaining the new 800-number choices to customers throughout the world. Each nation brings a unique telecom history and cultural perspective to the equation, and therefore requires a customised marketing plan. This is just one of the many growing pains now facing the global telecoms industry as a whole, and the International Telecommunications Union (ITU) in particular.

The ITU set off the international freephone services craze by approving the global 800 standard in 1996. This simple action created a new type of calling service -- the global toll-free number. Less than a year later, the top telecom carriers are vying to be international freephone service providers -- and the service is not even available yet. The hold-up is not on the carrier side, however. The ITU, which has final approval of all number applications, has not yet begun awarding numbers. As a result, some companies, such as USA Global Link, are telling customers to expect a 90-day wait between application and final award. In such cases, to reduce customer anxiety, USA Global Link for example, checks the ITU application database to see if the desired number already has been requested. Without access to this database, which is not available to the general public, there is no way to knowing if a number is available.

HISTORIC FREEPHONE NOTES

To fully-comprehend where the industry is going with international freephone, it is important to know where it has been, beginning with the launch of international freephone last year. The freephone phenomenon began in June 1996, when the ITU approved the standard and established some ground rules. These guidelines, which are still in place, stated that:

all companies that wish to claim an international freephone number must have applied through a qualified vendor by the February 1, 1997, deadline;

 

  • an application fee is required for each individual number request. (The fees averaged around US$ 420.);

     

  • participants must also have a number that terminates in one of the 14 nations participating in the international freephone agreement. (These include Australia, Belgium, Canada, Denmark, Finland, France, Great Britain, Hong Kong, Germany, Ireland, The Netherlands, Norway, Sweden, and the US. Japan and Singapore are expected to join this list soon, followed by Israel and New Zealand later this year.);

     

  • in the event that more than one company applies for the same number, the ITU will ask the representatives (for example, the telephone companies) to try to work it out themselves. The loser automatically gets its second choice of number;

     

  • customers have the right to retain their global freephone number even after changing carriers.

    Confusion set in shortly thereafter, as customers began clamouring to change existing toll-free numbers used in the US and Canada into global ones. The first challenge was that existing toll-free numbers are too short. Domestic 800-numbers are seven numbers plus the 800 prefix, while the international freephone numbers will be eight digits plus prefixes. (The 888 prefix introduced in the US last year will not be used in the global market.) This posed a dilemma for US businesses that own well-known vanity numbers. Although some vanity numbers are already eight digits when spelled out completely (for example, 1-800-MATTRESS), others are a neat seven-digits long.

    Even companies that have eight-letter vanity plates faced the harrowing decision of whether or not to pursue an international vanity number at all. Language, spelling, and cultural differences make it difficult to find an easy to remember word or phrase that will translate well throughout the world. In addition, US applicants were also told that vanity numbers are useless in Europe, because the dial pads do not have letters beneath the numbers. This is not exactly true, however. In 1994, the ITU approved an international keypad standard that emulates the existing US keypads, with one difference: the letter Q now appears on the 7, and the letter Z has been added to the 9. US telephone manufacturers have agreed to adopt this standard as well. (Despite these changes, some US carriers are continuing to pass along this fallacy.)

    The greatest barrier of all was greater competition for numbers. Business users who expected an easy transition from existing 800 numbers to the new international freephone system were unpleasantly surprised to discover that customers throughout the world were clamouring for the same digits. The ITUís rules did not help matters much. All applicants who met the February 1997 deadline were treated equally. In other words, if Company A applied for 1-800-1FLOWERS on the first day of applications, and Company B applied for the same number on the last day, it would be considered a tie. The ITU would then ask the companies to discuss it themselves and try to come to a compromise. The company that agrees to give up the number is supposed to automatically get its second choice, but that can get sticky if its second choice has already been claimed by yet another company. The result is a series of messy battles that has in some cases delayed the awarding of numbers. Once the battles settle down and the numbers are awarded, the winners have 90 days to implement a service. If a company fails to meet this deadline, it forfeits the number. If only one company has staked a claim to the number, it wins. If not, well, it is back to the negotiation stage.

    FREEPHONE TODAY

    The ITU is in the process of awarding numbers to applicants, who in turn are talking to customers about the new service. Not surprisingly, the major players are a veritable whoís-who of the telecom industry, including AT&T, Sprint, MCI Communications and partner BT, USA Global Link, France Telecom, and Deutsche Bundespost Telekom.

    All of these companies have applied for international freephone numbers, for themselves and/or for their customers. Approximately 2000 numbers are in conflict (that is, more than one company has applied for them), and none have been assigned successfully at this time. In the meantime, the telecom companies are continuing to market the services as revolutionary services which will make it easier for businesses to expand worldwide. This means large businesses will be able to streamline their existing offerings, thus saving money and improving operations while smaller companies will benefit from greater exposure in the international market. Both large and small businesses will benefit from having one telephone number for all access, both domestic and international.

    Businesses are not the only ones likely to benefit from international freephone, of course. There are more than 100 million freephone calls placed each day in the US alone, and opening up the international market will only increase the number of calls completed daily. This translates into big money for the telecom carriers themselves.

    The telecom industry is currently in a waiting pattern when it comes to international freephone services. The telephone companies will not be able to complete international freephone calls until an international database of the numbers has been set up. Such a database has not yet appeared, leaving the telecom industry with a highly-marketable service that it cannot deliver.

    In the meantime, however, companies still need to educate telecom customers about the good and bad sides of international freephone. This is especially true for US and Canadian companies that already have 800-numbers. People really do not know the difference between 800 and global 800. This is probably an historical problem. In the US, 800-numbers started out as a regional phenomenon. As companies began to see the benefit of toll-free calling, they demanded national exposure -- and got it. Finally, the customers began searching for an international 800 solution. However, global 800 might not be the answer these customers were hoping for.

    The fact is, there are a lot of well-established 800 numbers, and people are under the impression that these numbers can go overseas which is not the case. Another potential customer pitfall is billing. When an 800 number is dialled, it can terminate anywhere in the world so, for example, if a person dials a global 800 number from Seattle, it could end in Chicago. Then the company pays an international rate for a domestic call. Whether or not this actually happens depends on how the telecom carrier decides to bill the customer, of course. But it is a consideration for any company that markets both domestically and internationally. Maintaining a domestic 800-number even after procuring a global 800 number may be one solution.

    Many of the problems facing global 800 customers can only be resolved by the telecom carriers themselves. From education to conflict resolution, the customers rely on the telecom service provider for help. Herein lies the costs of starting up a new service and with it one of the biggest issues is all the administrative costs involved in setting up numbers. Of course, one major problem is that none of the providers can set a date for actual service delivery.

    The stakes are high in the global 800 battle. The telecom carriers could potentially gain millions of dollars in new revenues. The international freephone number owners also have their eyes on the golden goose. Presumably, an international toll-free number will attract customers who otherwise would never do business with them. The third faction, consumers who call toll-free numbers, stand to gain access to new businesses throughout the world that they would otherwise never know existed.

    So who will win? Primarily, big businesses, especially US multinational organisations with business-to-business connections. International freephone services will offer them a less expensive way to communicate between locations. European consumers could potentially benefit, as they will now be able to interact with companies in other European nations without paying international rates. Toll-free calling is not an established habit in Europe, however. In any case, it will be years before global 800 comes into its own. n

    Judith Oppenheimer is president of the ICB Toll Free Consultancy, a New York City-based firm which tracks the 800/888/global 800 marketplace. She may be contacted on Tel: + 1 212 684 7210; Fax: +1 212 684 2714; US Toll Free: 1 800 THE EXPERT (1 800 843 3973); E-mail: joppenheimer@icbtollfree.com. Alternatively, visit the ICB website: http://www.icbtollfree.com