Consumer Switching, Mis-selling & Mobile Number Portability

The Issue...

When consumers can switch between providers quickly and easily, consumers will benefit from enhanced competition in communications markets. Switching between communications providers is often complex, and involves steps that must be coordinated between different providers in ways that do not arise in other consumer markets. The way consumers switch providers today varies: sometimes, these processes have been developed by industry; some have been designed with input from Ofcom (or Oftel). There are different processes, even for the same services, often with very different features and experiences for consumers. Markets are changing, with more bundled services offered, which means that switching between providers with a bundle of services is even more complex and could lead to reduced competition.

Mis-selling covers a range of sales and marketing activities that can work against the interests of consumers. It includes giving false and/or misleading information, or applying unacceptable pressure to change telecoms providers, such as refusing to leave until the customer signs up or using threatening behaviour; ‘slamming' - where customers are simply switched from one company to another without their knowledge and consent.

Mobile Number Portability enables consumers to keep their mobile numbers when switching service provider.

Our objective...

To influence Ofcom to take steps towards ensuring that switching communications providers becomes easier for consumers. 

Our Current Position...

In the Panel's view, it is vital for Ofcom's Strategic Review of Consumer Switching to be founded on a clear understanding of how the market and consumer behaviour is developing. This should enable Ofcom to put in place a switching regime that will keep pace with changes in the sector and be fit for purpose well into the future.

The Panel believes the current regime is clearly not sustainable. We are particularly concerned that current switching processes will not keep pace with the trend towards increased bundling of services, including pay TV services, which often have different switching processes or no switching processes at all. This will become more of an issue as convergence continues and competition intensifies. Two key developments are the launch of IPTV services such as YouView and therollout of next-generation broadband services.

The Panel has advised Ofcom that its strategic aim should be unified switching processes for all communications services. As more consumers reach the end of their existing contracts and try to switch, there is likely to be a lot of frustration with the currently uncoordinated switching processes. We expect that a significant number of consumers will be discouraged from switching bundles because of the complexity of the processes and the confusion that results. This would mean reduced competition and a worse deal for consumers across the board. It would also be likely to lead to an increase in consumer complaints to both communications providers and Ofcom.

Based on the evidence which Ofcom has gathered, we support Ofcom's view that gaining provider-led processes should be the model for all switching processes. We do not have detailed views on how these processes should be designed; it will be for industry to develop these processes, with the help of strong leadership from Ofcom and input throughout from consumer representatives to ensure that the processes are designed around consumers' needs.

In relation to the costs of moving from the current switching processes to new processes, we think it is important to compare these costs with the benefits for consumers and small businesses, and the long-term dynamic benefits that will result from more pro-competitive processes.

The Panel thinks it is vital for Ofcom to make a clear decision now to move all switching processes to gaining provider-led. We would not want to see this issue reopened when Ofcom moves on to deal with mobile, pay TV and cable services.

We note that Ofcom has been working on improving switching processes for many years already. Consumers now require rapid action. So it is essential that this project continues to receive priority and we urge Ofcom to explore how the proposed timetable for completing this work could be compressed. It is hard to accept that Ofcom will not be able to start reviewing the switching processes for mobile, pay TV and cable services until 2012. One option would be to review the processes for switching these other services in parallel with the ongoing work on fixed-line and broadband services.

Relevant links...

Response to Ofcom strategic review of consumer switching, Nov 2010 (PDF 133KB, opens in a new window)

Response to BEREC consultation on best practice for switching processes, Jul 2010 (PDF 129KB, opens in a new window)

Mobile Number Portability response, Sept 2009 (PDF 51KB, opens in a new window)

Response to consultation on 'Protecting consumers from mis-selling of fixed-line telecommunications services' June 2009 (PDF 137KB, opens in a new window)

Advice to Ofcom on 'Mis-selling in the mobile market', January 2008 (PDF 19KB, opens in a new window)

Response to consultation on 'Migrations, Switching and Mis-selling', April 2006 (PDF 39KB, opens in a new window)

Advice to Ofcom on 'Migrations, switching and mis-selling', November 2005 (PDF 34KB, opens in a new window)

Response to consultation on 'Protecting citizen-consumers from mis-selling of fixed-line telecoms services', June 2004 (PDF 95KB, opens in a new window)

Email response from Ofcom, August 2004 (PDF 12KB, opens in a new window)

Our Impact...

The Panel supported the Ofcom team and contributed towards Ofcom taking the view that gaining provider-led processes should be the model for all switching processes.

Future Action to be Taken...

The Panel plans to continue to engage with Ofcom on this issue in relation to the publication of Ofcom's second consultation on this issue.  The Panel will continue to push for unified processes to be implemented as quickly as possible. The Panel would like to consider developing a case for a public campaign to increase consumer awareness of switching and the benefits it can bring, when resources allow.

>> Our Actions, Outputs and Stakeholder Engagement

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