Directory inquiries competitors vie for £20m market

Calling directory inquiries used to be as simple as dialling 192. But from now on anyone seeking that elusive telephone number will be able to choose from a further six companies all offering national number services on six-digit numbers beginning with 118, three more offering international services and one offering a Welsh service.

But The Independent's tests yesterday showed that although all the companies access the same nationally compiled database of numbers, the results, speed and costs of using them can vary widely.

The new codes will run alongside the present 192 service until August, when the old number will be switched off.

The companies entering the business – including the American firm Infonxx, which paid £2m in cash for the "118 118" code from a would-be rival – are all confident that they can make inroads into the £20m market, where 700 million calls were made last year. The most likely loser is BT, which took 500 million calls last year, and which has seen its directory inquiries monopoly gradually eroded over the past decade as individual phone operators have been granted the right to take calls dialled to 192 on their networks.

Darren Worswick, managing director of Leaf Telecom, which was initially awarded the 118 118 code by Oftel in May but then sold it to Infonxx, said that the first year or so would be "pretty aggressive", with BT and Infonxx fightight for market share.

The American company is already a leading player in directory inquiries in the US, and is expected to spend about £35m on marketing in the coming year.

Robert Pines, chief executive of Infonxx, said that he thought BT could lose more than 25 per cent of its market share in the first year to rivals offering other services.

The new entrants to the business insist that they will be offering broader services than simple number-finding for a name: some are promising more in-depth information such as local restaurants and cinema times and the ability to be connected rather than having to hang up the telephone first and redial.

Yet all are operating off the same database, called Osis (for Operator Services Information System), which is run by BT on behalf of the other companies.

The principal difference between the companies is in the computerised systems that are used to query the database, especially when the information given is imprecise.

The Independent's tests showed that, asked to find three numbers with a varying quality of information, the providers could differ widely – between 90 seconds for Orange, which was the fastest, and five minutes for Telegate, a newcomer. The Number, operated by Infonxx, took four and a half minutes to find the numbers and got one of them wrong.

The telecoms regulator Oftel predicts that opening up the market will improve services and drive down prices – although a spokeswoman noted that in Germany and the Republic of Ireland, which made similar moves four years ago, some of the providers had gone bust. "It will be up to the public to decide who they go with, based on quality and pricing," she said.

David Edmonds, director general of telecommunications, said: "Oftel's research shows that consumers are keen to take advantage of these new services and I expect to see rapid take-up in coming months."

BT is hoping to retain customers after the loss of the 192 code by offering a wide range of options. As well as standard phone numbers, BT's new 118 500 service provides cinema and television listings, Lottery results, weather forecasts, sports results and travel information.

Allan Williams, senior policy adviser at the Consumers' Association, said: "We think deregulation of directory inquiries is a good thing, offering better choice for consumers and potentially lower prices.

"There are two caveats to that and those are that consumers need to be aware of both the nature of the service and the cost."

The Federation of Small Businesses, representing 170,000 members, said the change was an upheaval that would affect efficiency. "We think they should leave 192 alone," said a spokesman.

* The 153 code for international directory inquiries would also end next August, Oftel said.