118 services sell up

Two of the latest operators of Britain's new 118 directory enquiries services are quitting the market.

The move is a blow to regulators who have always insisted that deregulation would lead to improved services and lower charges.

Directory Enquiries UK, the Londonbased business behind 118 800, has put itself up for sale.

Meanwhile, rival Conduit, which runs the 118 888 number, is close to concluding merger talks with German operator Telegate.

Conduit - whose owners include Jordan Grand Prix owner Eddie Jordan - is thought to have sold its British business to Telegate, Germany's second biggest directory enquiries operator. The two businesses had started out as the cheapest numbers, with Directory Enquiries UK charging 19p a minute for its service and Conduit 20p a minute.

However, both have recently ditched their blanket low-cost approach, with Directory Enquiries introducing a 29p connection fee alongside a new lower 9p per minute charge.

In November Conduit added a 25p connection charge, taking the cost of a 30-second call to 35p.

Some of the entrants to the directory services market - the old 192 number - have struggled to drum up sufficient call volumes to justify the costs of heavily-staffed call centres.

Recent surveys have shown many of the operators of the new 188 numbers have failed to meet their own standards of accuracy.