From regulator to rivals and undercover reporters... 'they've got your number'

The directory enquiries service has had a 'kicking' but 118 118 is coming back for more, writes Clayton Hirst

Chris Moss reaches over to the tape recorder and presses the "stop" button. The normally free-speaking chief executive of The Number, the company behind the 118 118 directory enquiries service, decides that a bit of impromptu censorship is required during the interview.

He is in mid-flow, recalling the letter he received from a customer who had bought one of the company's 1970s-style running vests, as featured in its popular advertising campaign.

Moss says: "He wrote saying: 'I just have to thank you for making a great weekend. I wore the shirt for a stag do in Newquay and I have never had so many girls write their phone numbers on my shirt.' Suffice to say, he managed to have a nice weekend with a girl he had never met before."

The letter goes into a little more detail, describing just how much of a good time the author had with his new friend. But rather sensibly Moss relays the full content off-the-record, judging that it isn't entirely appropriate for the purposes of this article.

The story demonstrates the marketing success of The Number. Competing against 29 rival directory enquiries companies, it burst on to the scene in August when the old 192 service was abolished. With its runners sporting droopy moustaches and red socks, the 118 118 adverts clicked with the general public and The Number has emerged as the main competitor to BT. Moss claims that 118 118 now has a greater market share (at 45 per cent) than BT's 118 500 (which he reckons has around 40 per cent).

The Number's chief executive worked for eight years as marketing director of Virgin Atlantic, during the British Airways "dirty tricks" scandal, before moving to Orange and then Lloyds TSB. And there is more than just a whiff of the Virgin way of doing business at The Number. "Our approach to marketing isn't about how polished we can make it, but to figure out how much fun it can be," says Moss. "It will not be long before 118 118 shirts create the first marriage - you know, the 'I met him because he was wearing a 118 shirt' sort of thing."

Like Virgin, The Number has taken risks, and its adverts haven't pleased everyone. David Bedford, the former 10,000 metres world record holder and now director of the Flora London Marathon, is planning legal action against 118 118, claiming the company has breached his image rights. During the 1970s, the athlete sported red socks, a droopy moustache and a shaggy hairstyle.

But Moss says: "I find it a little sad. I think it has somehow got blown totally out of proportion. When we started the project, we found hundreds of pictures of runners with dodgy moustaches, wearing running vests with hoops around them - that's what they wore in the Seventies.

"In the early days [of the campaign] we even approached Bedford because we wanted 118 118 in the London Marathon. At the time he wanted £30,000 to choose the runners; we said no. I think he's a decent bloke and people have probably just wound him up a bit. The best result would be for us to go out for a slap-up meal and have a good laugh about it."

Perhaps more worrying for The Number is that the introduction of competition into the directory enquiries market led in some cases to a slip in customer service and increased prices - giving the new companies a bad name. "[Deregulation] has been a tremendous success, although I would suggest people would think the opposite because of their experience through the critical period of August and September, when every single directories business was stretched beyond belief," says Moss. "The industry has taken a kicking and unfortunately we have had to stand up to some of that."

The Number's "kicking" came in September when a tabloid newspaper sent an undercover reporter to work at a 118 118 call centre. This led to a series of damaging allegations about the company's practices. In particular, the newspaper claimed that wrong numbers were routinely given out, sometimes deliberately. Moss says that some of the allegations were "wholly inaccurate", but he does admit to teething troubles.

"We had probably recruited several hundred people who were not right for the job. Little things like not coming into the office when they were supposed to, going Awol and not phoning in - these practices are not acceptable. But during a period when you are having to double the size of the business, you sort of relax the rules a bit."

Moss claims these problems are now behind the company and says he is "incredibly proud" of its service levels. However, a "mystery shopper" survey conduc- ted by telecoms regulator Oftel and published earlier this month didn't cast a good light on The Number. It found that 118 118 was more expensive and slower to retrieve numbers than the average. Critically, 118 118 fared worse than BT's 118 500 service. Oftel also found it was less accurate than BT. But with a 59 per cent success rate for residential numbers and 67 per cent for business ones, 118 118 performed slightly better than average.

"The results you get are a snapshot at any one time," says Moss. "Today I believe that we are more accurate than BT. One of the things we are questioning is: which numbers were [Oftel] asking for? I could give you 10 numbers right now and ask you to phone BT and they wouldn't find any of them. Yet I know that they are all on our database."

As the incumbent operator, BT supplies its competitors with a database of telephone numbers. One of Moss's biggest gripes is that this list contains errors. "From our experience, at least 10 per cent of it is out of sorts. We have a team of 20 people who do nothing but get data corrections, so we will have, without a shadow of a doubt, the finest data of any single business."

Owned by Infonxx, a private US directory enquiries business, The Number began preparing for 192 deregulation last year. But Moss claims BT hindered the company. "At one point they tried to gag us. BT tried to take an injunction to stop us phoning up customers - phoning up numbers to check them. BT tried to take us to court because it apparently had people calling and complaining that we were saying 192 was going away and people had no idea of this. BT got quite upset."

Three months into deregulation, BT has emerged as The Number's main competitor. Earlier this month, the Scotland-based telecoms company Thus became the first to quit the market after it was slated for poor service. Conduit, the Irish directory enquiries company tipped as an early favourite to steal a large market share, is struggling following the resignation of its chief executive.

Conduit is now for sale and The Num- ber has been touted as a potential buyer, but Moss says he's not interested. "It is not something we have talked about. We spoke to them about two years ago. We said: 'Let's join together and do this.' They looked at us rather strangely and said: 'Why would we want to do that?' "

Instead, The Number is concentrating on launching a new service based on its directory enquiries business. Moss explains: "I promise you that in a year's time, when we have got through deregulation, it will be ... 'I'd like to check my diary please.' 'Can you book me a restaurant?' 'Can you tell me the quickest way from here to there?' Or, 'I'm driving down the M1 and there's a tailback - how long is it?' Or how about: 'I need a plumber - get me one now.' These are the sort of services we can build around, which people can't even conceive of right now."

Whether it will include help with the stag night is as yet unclear.