Ref: 19/03
Date: 8 April 2003 

Proposals on how Oftel will assess the extent to which consumers get a good deal from their telecoms provider have been published today by the regulator.

By having a clear understanding of the level of savings consumers can make, Oftel will be able to better target consumer information for whom the benefits of switching provider are greatest.

David Edmonds, Director General of Telecommunications said today:

"The UK’s competitive telecoms market means there is plenty of choice for consumers, at a range of different prices.

"Oftel has published a number of consumer leaflets and there is advice on Oftel’s website on how to get the best deal for your telecoms service.

"Consumers are prepared to shop around to get a better deal, and over 10 million consumers have switched service providers at some point.

"Oftel’s research shows that many consumers are content to stay with the current service provider, because they are happy with the level of service they receive, or because they do not consider the savings large enough to justify the effort of switching.

"It is relatively straightforward to assess whether consumers are on the cheapest deal or not, but more difficult to assess whether consumers are on more expensive packages for quality of service reasons or simple inertia.

"By being able to identify which consumers are most likely to switch because of the potential savings they could make, Oftel will be able to target these groups with information on choosing the best deal for their telecoms service."

Oftel is seeking views from consumer organisations and the telecoms industry. The consultation period runs until 30 June 2003.

Oftel has today also welcomed the latest update of the consumer information website www.cpi.org.uk, which helps business and residential consumers compare the service performance of different fixed telecoms companies.

Notes to Editors

1. Assessing potential consumer savings: A consultation on a methodology for measuring consumer savings in telecoms services is available on Oftel's website at: www.oftel.gov.uk/publications/research/2003/consave0403.htm . Hard copies are available to the media from Oftel's Press Office on 020 7634 8991 and to the public from Oftel's Research and Information Unit on 020 7634 8761.

2. The methodology calculates the savings telecoms consumers could make by switching from their current tariff to the cheapest available tariff. The document suggests that the resulting estimate can be used as a proxy measure for the level of useful consumer information in any given market.

3. The document applies the methodology to the UK consumer mobile market and a segment of the fixed residential market and presents some preliminary results which can be interpreted as showing that, once switching costs and premium levels are considered, the remaining savings available to relevant consumers appear relatively small. However there may be some groups of consumers who could make more significant savings and could possibly benefit from additional information.

4. www.cpi.org.uk is part of the Comparable Performance Indicator initiative run by the Telecoms Industry Forum. Hard copies of the residential comparisons are also available from local libraries, and by phoning 0131 472 5555 or sending an e-mail to cpi@cpi.org.uk.