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New Licensing Regime for Premium Rate Phone Services

Providers of premium rate telephone services should take note of new rules which may require them to obtain a licence for the provision of their services.

The new statutory licensing regime applies to providers of Premium Rate Services (PRS) such as ringtones, text competitions and sports updates which are purchased by charging the cost of the service to a customer’s landline or mobile phone bill.  The regime is overseen by the Commission for Communications Regulation (ComReg) and replaces the self-regulatory regime previously administered by Regtel.  It is intended to protect consumers and in particular the more vulnerable elderly and child consumers who can easily be attracted to such services.

Providers of PRS costing over 25 cent per call/text (including VAT) are required to obtain a licence.  Providers of the following services are also required to hold a licence irrespective of the cost of the service:

  • chatline services (live or virtual);
  • sexual entertainment services;
  • children’s services;
  • subscription services; and
  • services operated by internet dialler software.

PRS accessed by an international call, directory enquiry services and services costing less than 25 cent (including VAT) per call/text which do not fall within the above categories do not have to be licensed.

In addition, providers of certain licensed PRS which are of particular consumer concern are required to hold a Certificate in respect of each individual service.  These services (known as “authorised services”) are:

  • chatline services;
  • services advertised as being for the benefit of charity or a non-profit organisation;
  • sexual entertainment services;
  • subscription services;
  • services operated by internet dialler software; and
  • quiz television services.

Licences are subject to conditions and ComReg may amend, suspend or revoke a licence in the case of non-compliance. ComReg also has responsibility for maintaining a register of licensed providers and for introducing a code of practice for PRS service providers.  Operating without a licence is an offence punishable by fines of up to €250,000.  A separate offence of overcharging customers has also been introduced.

The new regime entered into force on 12 July 2010, although providers who were authorised by Regtel prior to that date are deemed to be licensed until 12 January 2011.