Should you lease or buy 1300 Numbers/1800 Numbers?

After deciding to get an 1800 or 1300 number for your business, the next question you need to ask yourself is whether you should lease or buy the number.

How to buy a 1300/1800 number

You have 2 options when it comes to buying a 1300/1800 number:

• You can select from our list of available Normal Issue 1300 Numbers, 1800 Numbers, & 13 Numbers OR
• Use our Smartnumbers® search tool to select from our pool of available Smartnumbers, or check the availability of your preferred numbers from ACMA (Australian Communications and Media Authority).

Let’s start by defining what it means to “buy” a number.

All 13, 1300 and 1800 numbers (also known as inbound numbers) belong to the Australian government via the ACMA. When you buy a number, you’re actually only buying the rights to use that number according to its applicable rights of use (as defined by the ACMA).

There are two types of inbound numbers:

Normal issue numbers are available directly from telcos and have rights of use similar to your mobile phone number. There are around 10,000 normal issue numbers available at any time. Some telcos take the time to search through the list of available numbers each day, and reserve those with patterns or repeating digits for the exclusive use of their customers. Check telco web sites for a list of their numbers, which are available for a fraction of the cost of a smartnumber (typically less than $100).

After you obtain one of these numbers, it remains yours for as long as you keep it connected (otherwise it must be cancelled). Also, if your account becomes a bad debt, your telco has the right to cancel your number.

Smartnumbers are numbers that spell words or contain a pattern that makes them easy to remember. These are available from the Alltel Shop and come with extended rights of use, with prices starting at $250. After you have successfully obtained the rights of use for your smartnumber, you can have it carried by an inbound number specialist like Alltel.

The extended rights of use for Smartnumbers include the ability to on-sell the number, and to keep it unconnected for up to 3 years. Unlike 1300 and 1800 numbers, 13 numbers attract an annual government fee of $7,980 excluding GST. The government fee is in addition to connection and usage fees charged by your telco.

Note that many of the good Smartnumbers have already been purchased by phoneword companies and investors that lease them to end users. These days, you may find it difficult to create your own generic Smartnumber, which is why many businesses consider leasing.

Leasing a number

Phoneword (and other) companies that obtain Smartnumbers from the government receive extended rights of use, which allows them to lease those numbers to third parties. They provide two different models for leasing inbound numbers: exclusive use or shared use.

When you lease a number for exclusive use, the provider agrees that the number is yours and yours alone (for as long as you continue to pay their monthly lease fee).

The routing options available for inbound numbers make these numbers suitable for shared use. For example, a provider with the number 1800 CLEANER (1800 253 263) could allow customers to lease it by region or exchange. This number could then be shared by a number of cleaners based in different locations around the country. For example, if a caller rings from Ballarat, their call would be routed to the cleaner in Ballarat who leases this number; if another caller dials from Launceston, their call is routed to the Launceston cleaner; and so on. Again, the number is yours to use for as long as you continue to pay the monthly lease fee.

Buying vs leasing

When you buy the rights to use a number, you can keep that number for the life of your business. You can move it, not only from office to office as your business expands, but also from telco to telco if you decide you want to do business with a different provider.

When you lease from a provider, they are the ones with ultimate control over your number.

While some phoneword providers allow you to choose which telco you want to host your number, there are others who insist on you using either their own hosting services or those of a partner. Unfortunately, this leaves you with few options if you are unhappy with their hosting prices or service. Your provider will typically not let you purchase the number from them, which leaves you with two options: either keep your number and put up with the poor service/high prices, or else walk away and start over again with a new number and new provider.

You’re in the same position if your provider decides to increase the monthly lease payments for your number. Again, you can either pay the increased rates or else walk away.

Be warned that if you do walk away, you have no control over who the provider offers your old number to: there have been instances where numbers have been provided to direct competitors of the previous holder!

When you’re leasing, there’s also the concern of something happening to your provider (for example if they stop trading or are bought by another company). When the ownership of your number is transferred to a new party, it’s up to them to decide whether you can continue to use the number, and if so, what fees and conditions apply to your continued use.

So, should you lease or buy?

Your business phone number is essential as both a communications tool and a part of your branding. Therefore, it’s important to have the same level of control over your inbound number as you do over your business’s web site domain name.

You should only buy if:

• You want the number for the exclusive use of your company.
• You want the flexibility of being able to change telcos in future (for example, to receive better customer service or lower rates).
• You want the confidence of knowing that the number will continue to belong to you and continue to operate, no matter what happens to your existing provider.
• You want a cost-effective solution that doesn’t include paying a monthly lease fee for the use of your number.

You should only lease if:

• The number is available for lease in the area where you do business (that is, the postcodes or telephone exchange areas in your local area).
• The leasing cost per month is reasonable.
• You're happy to SHARE the use of a Smartnumber with other similar businesses/competitors in other geographical areas.

Note that sharing a number is recommended ONLY if you don't intend to expand your business into other geographic locations. While many Smartnumbers sell for their starting bid of $250, the more popular ones can cost many thousands of dollars. If you find a provider offering your preferred Smartnumber on a shared lease basis, and it is available for the area that your business services, leasing can be an affordable way of getting a number you might otherwise not be able to afford. Before signing anything, make sure you FULLY understand the risks that leasing entails.

If a provider’s web site does not make it clear whether their numbers attract a monthly lease fee, make sure you ask them to clarify that BEFORE you sign any contracts. It’s also a good idea to ensure that any carrier you do business with is a member of the TIO, which provides you with protection (just in case anything does go wrong). You can check to see if a carrier is a TIO member at www.tio.com.au/members/members-listing.