| Background
The industry
initiative, by the main telecoms companies providing direct
to the home service – BT, C&WC, Eurobell, NTL and
Telewest - to produce price comparisons for the residential
fixed line market was launched in early December 1999 on its
own website www.phonebills.org.uk This free and
independent service was welcomed by Oftel as it assists customers
in making better informed decisions when selecting their telecoms
supplier. It enables them to compare their phone bill with
other participating operators in their area, providing an
indication whether they could get a cheaper deal with another
company.
Consumers
could obtain their bill comparisons either on-line in real
time via the website www.phonebills.org.uk, or by leaving
their details on an automated phone line and their comparison
was subsequently posted to them. These were advertised quite
extensively in national media articles following an Oftel
press release, and via the distribution of 300,000 leaflets
in freesheet papers in 8 UK cities.
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Volume
of usage
As at
31st January 2000 there were over 340,000 hits
on the website (of these 47,000 accessed the results sheets)
and 600 calls to the phoneline*.
Customers
from all five of the participating operators have accessed
the site and whilst the majority viewed only one set of results,
about quarter viewed 2 or more comparisons. This suggests
that some consumers are either testing different alternatives
based on their own phone usage, or perhaps accessing results
for friends or family members.
*
The phoneline was not mentioned in the initial press release
that attracted the greatest amount of media coverage, as it
was still in the final stages of testing. Hence the considerably
lower use of the phoneline compared to the website.
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Consumer
research
Summary
Reaction
to the bill comparisons was very positive, the majority of
respondents found them easy to use and had no problems understanding
the questions, instructions or results. In total 7 in 10 users
were BT customers’ although customers from all five participating
companies were represented. Overall 2 in 5 were recommended
cheaper packages/suppliers. Of these 1 in 4 had or intended
to switch to another supplier, which equates to about 10%
of total users. In future 3 in 4 said they would use the service
again and over 4 in 5 wanted to see monthly or quarterly updates.
Consumer
Opinion on the bill comparisons service
Following
the launch of the Residential bill comparisons web site on
6th December 1999, and telephone service shortly
afterwards, Oftel commissioned On Line Telephone Surveys to
carry out research amongst the initial users of the bill comparisons.
During
the survey period, 17th December to 20th
January, there were three waves of interviewing. In total
410 users of the Web site and 60 users of the phone service
were interviewed. The survey aimed to assess users' perceptions
in relation to the ease of using the bill comparisons and
their usefulness, the amount of savings they found they could
make and their follow up action, as well as future demand
for this type of bill comparison service.
Using
the bill comparisons
The majority
of users found the bill comparisons user friendly and the
questions, instructions and results easy to understand. The
chart below illustrates how different aspects of the service
were received.
What
the results showed
Overall,
4 in 10 users were told they could make savings either with
their own or another supplier. Over 50% of these found they
could make savings of up to £20. More substantial savings
were to be made by moving supplier rather than moving packages
within the same supplier.17% of users were recommended cheaper
packages with their current supplier and 25% were recommended
cheaper packages with an alternative supplier. Cable customers
were considerably more likely than BT customers to discover
they were already on the cheapest tariff and therefore were
not recommended savings elsewhere.
Just over
1 in 4 of those who were recommended cheaper packages from
their existing supplier or alternative supplier had switched
or intended to switch. This equates to about 10% of total
customers. There was a positive correlation between the amount
of saving recommended and the number of switchers. Savings
of £20 per quarter or more were most likely to encourage switching.
However, price was not the only consideration and those customers
who had already switched supplier claimed they took other
factors such as range of products/services, perceptions of
reliability and quality of service, and recommendations from
friends or family into account. The main reasons others didn’t
intend to switch were "Not enough saving" and "Satisfaction
with current supplier".
The
Future
In conclusion,
it is evident that consumers like being better informed given
that 3 in 4 said they would use the bill comparison again.
This reinforces the findings of Oftel’s previous research
that illustrated the demand for this type of service. 4 in
5 of those previously questioned said they would prefer a
generic bill comparison service rather than an individual
bill comparison service, where they would send their bill
off for analysis. See ‘Demand
for Residential Price Comparisons’ for the full report.
In relation
to future frequency of the service over 4 in 5 wanted to see
monthly or quarterly updates of the bill comparison service.
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The
next steps
Clearly
there is demand amongst consumers for regular publication
of these type of comparisons which enable them to compare
what they would pay with different suppliers. Consumers
like being better informed and the results of this research
suggest that the phone bills comparison service goes some
way to providing them with information that can assist them
in making better informed choices with regard to their telecoms
service. This is however a starting point, and it has
been recognised by both consumers and the telecoms industry
that the scope and detail of these comparisons could be usefully
extended. Plans are currently underway to include a wider
range of operators, including indirect and Calls & Access
suppliers, along with and expansion of customer profiles,
eg to incorporate the growing use of Internet.
It is
planned that these ‘new and improved’ bill comparisons
will be available in Spring 2000. Whilst discussions are still
ongoing as to the frequency of updates, Oftel will continue
to encourage the industry to publish on a regular basis to
assist customers make better informed decisions when selecting
a home telecoms provider. Updates will be detailed
on our bill comparison pages
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