Ensuring broadband, phone and TV customers are treated fairly.
The UK’s telecoms markets are among the most competitive in the world. Together with market innovation, this has helped to deliver lower prices, better service, wider coverage and improved reliability. But choice can sometimes be confusing. Ofcom wants customers to get a fair deal for their services.
Ensuring fairness for customers – particularly those who might find it difficult to navigate the market such as those in vulnerable circumstances, is a priority for us.
We want customers to take full advantage of the choice available, shop around with confidence and secure a fair price for their needs.
From February this year, broadband, phone and TV customers must be told when their contract is coming to an end, and be shown the best deals available to them, including SIM-only deals for customers on bundled mobile handset contracts. Those already out of contract will also have to be given reminders and shown the best deals every year.
Alongside these new rules, we secured commitments from providers to limit the potential harm for any customers who might not respond to these notifications, or who face barriers to engaging with their provider.
We conducted a review of the prices paid by mobile customers who bundle their handset and airtime together. We found around 1.4 million customers could save an average of £11 a month if they switched to a cheaper SIM-only deal. Our targeted action led to commitment from the major mobile companies – apart from Three – to reduce bills for customers who are past their initial contract period.
We are also considering whether we need to act in relation to ‘split’ contracts, where the customer has separate contracts for their handset and airtime. These contracts provide more pricing transparency and offer customers another way to buy expensive handsets in instalments – but they might tie customers into overly long airtime contracts and make it harder for them to switch.
We undertook a comprehensive study of broadband pricing practices, to understand why some customers pay more than others
–particularly those who may be vulnerable. Having analysed 20 million customer tariffs, we found around 8.8 million customers were out of contract and stood to make significant savings by negotiating a new deal with their existing provider (up to £8 to £9 per month) or by switching to a new one (up to £9 to £10 per month). While we found that vulnerable people are no more likely to be out-of-contract than broadband customers overall, we remain concerned that some vulnerable consumers are paying higher prices.
Again, we secured a range of commitments from the UK’s largest broadband companies to cut prices for those who are out of contract and to help protect vulnerable customers. Some committed to undertake annual price reviews for vulnerable customers. Others committed to reduce the difference between the monthly prices paid by new or re-contracted and out-of-contract customers.
We will provide an update to our broadband pricing review in Q2 2020/21.
We will continue to monitor where households have difficulty paying for communications services, with a particular focus on broadband services, and consider if any measures are needed to support consumers who are financially vulnerable.
We continue to work to make sure people have access to the right information to help them shop around. We publish research and data including:
We recognise that giving people the right information might not always be enough to help them find a better deal, especially if they are put off by the hassle of switching provider. Last July we introduced text-to-switch, meaning mobile customers can now switch provider by simply sending a free text.
We also introduced a ban on notice period charges beyond the switch date for mobile customers. We have since also proposed new rules to ban mobile companies from selling handsets locked to their network.
We have previously made it easier for broadband customers on Openreach’s copper network to switch. Last December, we proposed new rules to make it easier to switch broadband services between different networks or between providers of full-fibre broadband services on the same network. We also proposed a ban on notice period charges beyond the switch date for broadband customers.
Underpinning all this work is a drive to make sure providers put fairness first, good practices should be at the heart of every provider’s business. Over the past year we have secured new fairness commitments from all the UK’s biggest broadband, phone and pay TV companies. We plan to publish a progress update in the autumn to report on whether companies are delivering on their promises. To help ensure greater clarity about our approach, we have also published a new ‘fairness framework’ which sets out how we propose to assess fairness issues and the kinds of concerns that might prompt intervention.
We have also consulted on a new package of consumer protection measures to implement the European Electronic Communications Code (EECC), a new EU Directive that updates the regulatory framework for communications services. In addition to some of the measures outlined above, we also outlined plans to:
If companies are not treating customers fairly, we will step in and take action. Our regular reporting on customers’ experiences – including the prices they pay – will help shine a light on unfair practices.
We are continuing to make sure customers are treated fairly, pay fair prices and can easily take advantages of the best deals available to them. As well as monitoring the impact of the changes we have made or proposed, we will help improve the way providers identify and support vulnerable customers.
We will be carrying out a review of our automatic compensation scheme later this year. This was introduced in April 2019 and means landline and broadband customers are getting money back from their providers without having to ask for it for slow repairs, delayed installations or missed engineer appointments.