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28|08|08

Mobile regulation assessment: Competition and customer service in a converging mobile world

Ofcom today published an initial consultation document assessing how the mobile sector delivers on the needs of UK citizens and consumers and posing questions about the future of competition and regulatory policy.

Ofcom’s aims for the sector are to ensure that:

• consumers get the best choice and value for money whilst being protected from inappropriate practices like mis-selling;
• the industry continues to thrive and innovate, to the benefit of consumers, driven by vibrant competition; and
• regulation evolves to reflect the changing needs of citizens, consumers and the industry.   

The consultation is part of Ofcom’s work to ensure that regulation reflects the reality of the converging market and considers how regulation should evolve as choice of mobile and fixed services expands.

The UK has ‘gone mobile’

The number of mobile phone subscriptions in the UK stands at over 70 million, exceeding the population of 60 million with households now more likely to have a mobile service than a fixed service. Some 85% of the adult population in the UK now have a mobile and it has become the device that we would not leave home without.

Many of today’s mobile devices are used to access the internet, take pictures, create and watch films and find locations. For many, they are replacing fixed-line phones, cameras, video recorders and maps. Increasingly popular mobile broadband services offer the convenience of broadband on the move.

The UK has the most competitive mobile industry in Europe – with five operators and a healthy number of virtual network operators competing to offer services. The sector generates over £15bn a year - 51% of overall retail revenue for telecoms in the UK. The mobile sector now produces more revenue than fixed voice and broadband services combined.

Regulating for change

Mobile citizens, mobile consumers looks at how regulation should evolve in a changing market, including:

• Consumer interest: over 90% of us are happy with our mobile service - but too many are not. Ofcom is concerned that complaints by consumers about mobile services appear to be rising. We are looking at how to ensure that rules to protect consumers are clear, effective and relevant, given the rapid changes in technology;
• Mobile as part of the broader communications market: the consultation considers how growth in mobile use is changing the wider communications sector and the implications for regulation. Ofcom wants to ensure that regulation supports innovation and will deregulate where competition works to protect consumers and citizens;
• Approach to regulation: in 2007, Ofcom set mobile termination rates, the charges that operators make to connect calls to each others’ networks, to come down year on year. Ofcom’s consultation asks whether this approach to regulation is appropriate for the future or whether there are more attractive alternatives; and
• Broadening mobile access: the consultation also asks what approaches could be taken to extend the coverage of mobile networks, both to address so called “not spots” in 2G and to build coverage in 3G.

Ofcom’s Chief Executive, Ed Richards said: “Mobile communication is now a central feature of modern life. As our flourishing mobile sector evolves, we want to help maintain strong competition and innovation alongside consumer protection.  With significant market and technology developments underway, now is the right time to ask some tough questions about the future approach to regulation. We look forward to a wide ranging debate on these issues.”

The consultation which closes on 6 November can be found at: http://www.ofcom.org.uk/consult/condocs/msa08/

It includes an interactive executive summary which can be found at:
http://comment.ofcom.org.uk/msa_summary/

Ofcom has also launched a blog on the subject of mobile communications including an article providing an overview of the consultation: http://comment.ofcom.org.uk/mobileblog/

A video explaining the consultation can be seen at: http://www.ofcom.org.uk/media/news/2008/08/nr_20080828

Ends.

NOTES FOR EDITORS

1. Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services.
2. The mobile sector in 2007 at a glance:
   • Number of network operators: 5
   • Number of mobile connections: 74 million
   • UK mobile retail revenues: £15.1bn
   • Number of mobile voice calls: 115.6 minutes per month per subscriber
   • Number of SMS and MMS messages sent: 59.1bn
   • Average time spent texting and calling per mobile connection: 10 minutes per day

Slides from the presentation by Ed Richards

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