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Telcos Need To Improve Transparency On Pricing And Coverage Says ComCom

New draft Guidelines issued by the Commerce Commission would require telecommunications providers to be more transparent about their prices and coverage so that Kiwi consumers can make better comparisons and choices. 

Telecommunications Commissioner, Tristan Gilbertson, says mobile coverage maps are inconsistent between providers and difficult for consumers to compare. 

“Coverage differences matter – especially for rural consumers or people travelling or commuting. Knowing what real-world coverage they can expect from different providers and technologies is important – especially with 5G roll-out and competition heating up.”

Mr Gilbertson says he wants providers to standardise their maps – to make it easier for consumers to understand and compare coverage between providers in different areas – and stand behind their coverage claims when things go wrong.

"When consumers run into real world coverage problems – compared with what's presented in computer generated coverage maps – they should be able to walk away from their service without penalty."

In addition to tackling coverage, the draft Guidelines also require providers to include a monthly average price in their broadband and mobile advertising to make it easier for consumers to compare offers. 

“Consumers find it difficult to navigate different combinations of billing terms, discounts, and promotions. We want providers to cut through the complexity by disclosing upfront how much consumers will pay each month for a particular deal,” Mr Gilbertson says.

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“Our work shows that consumers find it easier to shop around when they know how much they’ll be paying on average each month – so disclosing this upfront will reduce uncertainty and enable more meaningful comparison and choice.”

The draft Guidelines also propose:

  • disclosing the total minimum cost to consumers of an offer over the term of the contract as part of the sign-up process;
  • standardising the approach to letting customers know about contract early termination fees at sign-up and on their bills; and
  • making standardised offer summaries available so that consumers can easily compare what they’ll get between providers

“Currently, most offers don’t specify the total cost over the term of the contract or clearly set out what would have to be paid if the consumer needs to exit. We think it’s important consumers have this information from the outset so they know exactly what they’re signing up to.”

Mr Gilbertson says the Commission has consulted extensively over the past year to identify the areas where consumers need better information to enable more meaningful comparison and choice, as well as the best way of getting that information from providers.

"Comparison and choice are at the heart of competition – so we want to see providers stepping up to give consumers the information they need to make more confident and informed decisions."

Background

These draft Guidelines

are part of the Commission’s ongoing work to improve retail service quality in the telecommunications market and address pain points for consumers.

Research shows that the difficulty of comparing prices, costs, and coverage is a major driver of customer dissatisfaction and complaints.

Over the past year the Commission has been developing proposals designed to make comparisons easier in consultation with industry and consumer groups. This has involved multiple rounds of stakeholder consultation and engagement, including a consumer survey that generated over 1000 responses, and consumer research to help refine proposals.

The Commission is now seeking views from industry and consumer group stakeholders on draft Guidelines to implement the proposals that have resulted from this process.

This builds on the work the Commission has already done in the retail service quality space:

  • Dispute Resolution Scheme – Improving the effectiveness of the industry dispute resolution scheme for consumers who run into problems with their provider.
  • Mobile Transparency – Improving the ability of consumers to know whether they are on the best mobile plan relative to their usage and spend.
  • Broadband Marketing – Improving the marketing of broadband services to consumers including a requirement to use likely actual peak time speeds in advertising (rather than “up to” speeds or theoretical maximums) and provide an “exit right” for consumers to walk away without penalty if their service fails to deliver what was advertised.
  • Customer Service: Improving the ability of consumers to see how different providers are performing and encouraging providers to lift their customer service levels.
  • Bundles: Improving transparency of energy/broadband bundles by requiring providers to disclose when energy costs more in a bundle than on a stand-alone basis.

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