It’s make or break for the telecoms sector’s shot at reform
One of the great ironies of the telecoms industry is that, for a sector that is primarily focused on technological innovation and future infrastructure, certain aspects of it are decidedly backwards looking.
There’s a clear divide between, say, the gathering momentum in the roll-out of ultrafast broadband and the distinct stasis when it comes to the fundamental basics.
If we look at the provision of information and customer transparency, for example, broadband and mobile providers remain leagues behind other sectors.
Unlike energy and insurance, for example, there’s currently no obligation for telecoms providers to tell customers when their current broadband package or pay monthly mobile contract is due to end.
With users often being hit by massively inflated charges as soon as their contracts end (as much as 82 per cent for certain standard broadband contracts), UK customers are currently penalised to the tune of £40 a second without being a given a fair chance to avoid it.
This is felt all the more keenly as customers have come to expect end of contract warnings from other utility providers. But in telecoms, consumers are in the dark.
The good news is that Ofcom, the telecoms regulator, has recently started the process to address this in its proposal to force providers to notify customers towards the end of their contracts, or let them know if they have been out of contract for some time.
This has the potential to be bring telecoms in line with the basic consumer protections which are the norm in other industries. But the impact of these notices, and whether they help customers to move more easily between contracts to save money, all rests on the crucial detail.
If these notices do not give customers the full picture of how much they’ll be paying should they carry on with the same contract, they’ll be robbed of the chance to make an informed decision.
The timing of these notices is a potentially more important detail. The regulator is currently suggesting a 40 to 70 day window before the end of the contract for telecoms providers to tell their customers that their deal is coming to an end.
Providers, who benefit hugely from the status quo (which sees millions of consumers needlessly overpaying), could take advantage.
After all, if you’re warned two months before your contract is due to end, you’d be forgiven for it not being at the forefront of your mind by the time that expiration date comes around.
It would be less shining the light of transparency, and more a fleeting flicker. This generous wiggle room threatens to make Ofcom’s chance at genuine reform a toothless gesture.
This is a one-off chance for the regulator to overhaul an industry that has so far lagged behind.
Any concession it makes in terms of the all-important small print of these warnings, threatens to give providers a free-pass and miss the opportunity to take the telecoms sector out of the dark ages.