It's good to see that consumer programmes like the BBC's Rip Off Britain want to broadcast the positive work we do to protect consumer interests. The show this week looked at the problems people face when they can't get mobile coverage with their provider, and can't find a way out of their contract. The story has been a familiar one to the Consumer Panel, and led us to commission research to discover just how big a problem it is; and the very clear answer was that it was much bigger than the rather superficial national statistics would suggest. As the Panel Chair Anna Bradley said in her interview on the programme "all consumers should have the right to have a phone that works in the places that they want it to work". Following discussions with providers on the basis of our research, a number of improvements have already been introduced, so we've achieved some positive change for consumers - and that's what our work is all about.
A couple of weeks ago I attended the Consumer Forum for Communications, hosted by Ofcom and attended by a wide range of consumer groups. One of the items was a discussion about spectrum, including how it works, the history and some of the current issues. There has been an explosion of services in the past 20 years which have placed huge new demands on spectrum, including the increasing popularity of 3G. In just over 2 years over 4m mobile dongles* have been sold, and in 2009 mobile data traffic increased 200%. The popularity of these and other technologies is putting increasing pressure on the quality of service some consumers receive. So, while it may sound like something to leave to the geeks, spectrum has important implications for consumers.
Under the previous government, a deal was brokered by the Independent Spectrum Broker Kip Meek, designed to free up capacity on the networks. The deal is sitting on the new Government's books as a statutory instrument, which means it could be ready to go. However, it is controversial, with BT and a number of the mobile operators unhappy with the terms of the deal. The problems aren't going to go away though, and while there is no perfect solution the status quo is clearly not in the interests of consumers.
In last week's budget George Osbourne announced that a decision on spectrum would be made before Summer recess on 21 July, so hopefully we will soon have some answers. The hope is that whatever decision the new coalition government takes, they will make sure that the interests of consumers as well as industry are central. And, while it is likely to be a difficult task, the prospect of a little extra revenue for the treasury from any future spectrum auctions may provide some motivation - especially given all the talk of austerity and cuts.
*Dongles are also sometimes called USB modems. They are a small piece of hardware that connects to a laptop or desktop computer and plugs the user in to a wireless network.
There was a general sense of optimism - and quite a lot of excitement - at yesterday's Westminster eForum on the Future of Mobile. The strapline ‘More than Talk....' aptly summed up much of the sense of the discussion, with ‘aps' (applications) very much the buzz term. Aps of the future varied from using your mobile as a check-out device at supermarkets to the Chinese authorities using mobile to keep track of sheep in the more remote parts of their country; and it's worth noting the extraordinarily high levels of mobile penetration in some of the most underdeveloped parts of the world, including sub-Saharan Africa.
In a session on the future of regulation, I introduced something of a reality check on behalf of the Consumer Panel, reminding the audience of the Panel's work on consumer concerns relating to mobile coverage here and now, in the UK.
Of course, the mobile industry has been very successful in developing over the years, against a framework of relatively light touch regulation, to the extent that the mobile device is now central to our lives; but with centrality comes responsibility and there remain issues to be resolved. In addition to truly reliable coverage, consumers want good and better information; better complaints handling; a better process for porting numbers - to name just a few. Kevin Russell, the Chief Executive, 3, who was the keynote speaker, made a particular plea that the high level of termination charges should be tackled.
Several speakers echoed one of the Panel's concerns that, with the range of services available from a mobile device, a number of different regulators might be involved - Ofcom, PhonePayPlus, the ASA, the Financial Services Authority, the Gambling Commission and others. Regulators need to agree that one will take ownership of a customer's issue when it cuts across more than one regulator's area of responsibility.
Regulation should protect consumers while delivering the competition and innovation that is ultimately in their best interests. Industry has the opportunity to tackle consumer concerns and avoid the need for overly intrusive regulation going forward.
The publication of new research data on consumer and small business experience on mobile phone use is welcome. This data supports what many have been thinking but had inadequate independent evidence to express. Despite claims about good mobile coverage by many providers, consumers and small businesses do have problems. They have problems because of significant ‘not spots' and because mobility is limited. Few journeys can be made without a disruption of service.
91% of small business users and 56% of consumers across the UK regularly have intermittent and poor quality service - this rises to 59% of consumers in Northern Ireland.
The surprise is that so many report satisfaction with their mobile service given the number of problems experienced. It is also surprising that so few do anything about it. About 1 in 5 consumers will take some sort of action, most often contacting their provider. 3 in 5 small business consumers will take some sort of action, including contacting their provider and even changing supplier. Are our expectations too low? If so it is sad because it is in effect allowing providers to continue delivery of a poor service.
In fact quality of service and reception is more important even than cost. What consumers find most frustrating is to discover no reception in their own home and yet be locked into a contract. Not surprisingly small business users want good coverage in their place of work. 99% of private sector businesses in NI are SME's. For them poor mobile coverage is a business critical issue.
Northern Ireland also has the highest number of mobile only users in the UK. Some 13% of households have mobile only. For them quality of service at home is critical.
What can be done? The Consumer Panel is right to call for:
Let's hope this new research data energises providers, regulators and consumers to do more to get the service improved.
By the end of March this year, 46% of all UK homes bought their communications services in bundles - and the trend seems likely to continue, and include an increasing proportion where mobile services are a part of the package. Given the increasing popularity of service bundles, it's clear that consumers would benefit from a more unified switching process for communications services.
With this in mind, the Panel sent a letter today in response to Ofcom's consultation on mobile number portability - the process by which you switch from one provider and deal to another, but keep your original number. (You can read the full letter here.) The Panel is pleased that Ofcom intends to improve the system of mobile number portability. In doing so, it will be important to consider how this will tie in with plans to develop a more unified switching process for communications services. As far as possible, the Panel thinks that the switching processes for communications services and the process of porting mobile numbers should be consistent and require the limited involvement of consumers.
It's important that simplifying or speeding up the process of porting numbers doesn't cause undesirable side effects - the slamming and scamming potentials for consumers to be switched to a new provider without their consent, or consumers having insufficient information to make an informed decision.
One thing which the UK might usefully draw lessons from in moving this forward, is the French model. There, consumers receive a code when they request a switch, avoiding the need to communicate with either the gaining or loosing provder. They also get a text which tells them how long their current contract has to run, or whether they are out of contract. We were happy to see that Ofcom's consultation looks at how other countries' strategies for improving mobile number porting, including the French system. Our current system has been a source of frustration for consumers for some time now, so it's exciting to see the possibilities for improvement which could be developed here.
In order to seek further views from consumer representatives on the importance and impact of mobile termination rates to consumers, Ofcom and the Communications Consumer Panel jointly hosted a round table discussion, on 14 September, with organisations which have responded to the recent Mobile Sector Assessment consultation. The purpose was to explore views in a little more depth and seek comments on alternative ways forward.
Briefly a mobile termination rate is the price paid by the operator of the network from which a call to mobile is made, to the network operator of the person who receives the call. It is intended to compensate the second (mobile) operator for the cost of carrying the call to the person being called. The cost to the first operator is covered by the charge to the person making the first call.
There seems to be universal agreement both with industry and with consumers that this area needs to be regulated and that, in all cases mobile termination rates will continue to fall, which is good news for consumers.
There was also healthy scepticism among the group about some of the claims by those operators who want to see radical change about the extent of current consumer harm, and also about the claims of the damaging effects that might result from changes, by those operators who do not want to see radical change.
The conclusion from the consumer groups present was that this was not the most important topic in telecommunications for their clients, but that there was a specific area of detriment in that it affects text relay services for deaf people and they could see some advantage from lower prices leading to inclusion of calls to mobile in the package deals from BT and other fixed operators. There was however concern that a regulatory intervention to reduce calls to mobile charges to very low levels might have an effect on other consumers if prices were to rise elsewhere to compensate. No one felt confident to predict where and to what extent this might happen. For a fuller description of how this might affect individual groups see the paper from Antelope Consulting that the Panel commissioned earlier this year.
The consumer groups concluded that in deciding between options, Ofcom should consider four principles.
This is not the biggest issue for consumers and so, to avoid confusion, an evolutionary change is preferable to a sudden one.
Ofcom released their consultation document ‘Mostly Mobile‘ on 8 July. It is a clever title which recognises the changes in the communications world over recent years. Both mobile take up and customer satisfaction are high and citizens now regard mobile services as central to their lives and so Ofcom's assessment needs to be against that ‘centrality' background.
The mobile operators tell us that complaints about network coverage are a relatively small proportion of all complaints. And that may well be the case; but for some people, especially those who live outside urban areas coverage remains an issue for this service which is ‘central' to their lives. We welcome the focus that Ofcom have given to this issue in the consultation document and the recognition that competition is unlikely to materially improve coverage. We hope that the consultation with operators, the devolved administrations and others can result in ways of making improvements for those customers who experience poor or non existent coverage. We commented on this in our press release responding to the issue of the consultation document .
Progress has been made on both ‘999 roaming' i.e being able to make a call on another network if your own is unavailable and on reducing misselling, but we will be monitoring both to ensure that progress continues.
Other areas of consumer concern that we will be discussing with Ofcom are
As ever we would welcome any comments
Mobile termination rates have been the subject of two Competition Commission Enquiries, much self interested argument between fixed and mobile operators and grandstanding by politicians and the media about ‘rip off prices'. The rates are under review by both Ofcom and the European Commission. The Communications Consumer Panel has sought to cut through the technicalities and highlight the consumer issues involved.
Briefly, a ‘mobile termination rate' is the price paid by the operator of the network from which a call to a mobile is made, to the network operator of the person who receives the call. It is intended to compensate the second (mobile) operator for the cost of carrying the call to the person being called. The cost to the first operator is recovered in the cost that is charged to the person making the call. It sounds esoteric and technical.... and it is, but major changes could have implications for some groups of consumers.
The Panel therefore commissioned a paper from Antelope Consulting, which gives an objective review of the arguments around mobile termination rates, with an emphasis on how the various alternatives would affect consumers.
We do not wish to get into the detailed methodological debates, but will expect to see the final proposals reflecting the consumer and citizen interests in the following ways:
We welcome the long term review of the future of mobile termination rates being conducted by Ofcom, but ask that, in the arguments between operators, economists, accountants and politicians, the effect on consumers and citizens be paramount.