Ofcom, the Super Regulator that looks after telecoms, spectrum, broadcasting and media and now the Post Office has published a statement on "Promoting efficient use of geographic telephone numbers". This is a fundamental change to the way Ofcom issues telephone numbers as it will now charge telecommunications providers for number blocks. This initially only applies to 11 exchanges where numbers are in short supply (these will now have a 5 digit area codes). This change will also mean that in these areas local users will have to dial the full telephone number including the area code instead of just the local part of the code. This is so that 0 and 1 can be used in the local part of the code (i.e. Bournemouth has the 01202 area code and the local part is ABCDEF, currently the A digit can not be 0 or 1 or there would be confusion when dialing numbers starting with 0 or 1 such as 118XXX, by enforcing the area code is dialed, this adds another 200,000 local codes). Smaller providers likely to suffer Many telecoms providers just reserve numbers across all the area codes so if a customer joins their service (whether it's a traditional landline telco or a new VoIP service) customers can just get a local number (many VoIP providers allow customers to select their own number). This has been the way to do things ever since the telecomms market was deregulated by the Communications Act 2003. Now providers will have to pay for these blocks of numbers in these protected area codes and blocks of 100 numbers can be purchased at a time (in unprotected areas allocation normally occurs in blocks of 10,000 which is legacy and due to the fact that providers have to tell all the other telcos what blocks they own and this was done by sending faxes around). This will generally only burden the smaller operators such as VoIP providers who are running on very thin margins and having ot pay for number blocks will directly impact their revenue models. Players such as BT will be affected but the actual percentage costs will be negligible. It's also an issue as this is a retrograde charge so all providers who have numbers allocated in the protected areas will have to start paying for them and since previously blocks were made up of 10,000 numbers those bills could be large. Obviously the networks can return them to Ofcom, but this may be problematic if numbers haven't been issued sequentially from the start of the block as then the provider may have to pay for 100 numbers even though only 1 has been allocated in that 100 block. Future The UK is an anomaly and many countries already charge for number allocations. If this pilot scheme works for Ofcom, it's likely to make this happen for all number allocations and not just for areas which have a shortage of numbers available. This then will have a major impact on the smaller providers. Unfortunately the UK is actually hindered by having such a a well established telecommunications system as many of the processes involved have been around for 10's of years and they are still in operation and very hard to change.