‘ Cut through the complexity’: Watchdog issues warning to telcos
A market watchdog has asked telcos to introduce five measures he says will make it easier to work out the total cost of a mobile or broadband plan — which might have goodies or free months stacked towards the start of long terms, or costs hidden in fine print.
Telecommunications Commissioner Tristan Gilbertson wants providers to prominently display the average monthly cost of a plan, the total cost, provide plan summaries and the cost of any break fees. He says he also wants “more consistent” coverage maps.
Like the watchdog’s other recent attempts to lean on the telcos — largely ignored — these are a voluntary set of guidelines.
His preference was to give it a few months to constructively work with telcos - but he also told the Weekend Herald if that ultimately doesn’t work, he could take the “big stick” and introduce a mandatory code of conduct.
Gilbertson said he realised the requested changes could be “confronting” but that telcos had ultimately come onboard with other measures, such as quoting performance speeds from the commission’s Measuring Broadband NZ testing.
“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.
“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.”
It’s part of a rolling wave of initiatives by Gilbertson he says will make it easier for people to shop around — although so far telcos have preferred to follow their own steps.
In September, the first Commerce Commission “customer service league table” was released, ranking the phone companies, plus power companies who bundle mobile or broadband.
Gilbertson asked Spark, One NZ, 2degrees to display the league table prominently on their home pages, and in their stores. None of them have — though One NZ has begun publishing daily stats on its contact page, including average waiting times.
The same month, the commissioner called power- andbroadband plans “bundles of confusion”. He said electricity and gas could be more expensive when part of a plan that also included broadband or mobile. He proposed the standalone cost of power be displayed beside bundled plans, so customers could gauge if they were good value for money.
Two of the top- tier of power retailers — Contact and Mercury — offer plans that bundle power with broadband or mobile phone service.
It was not immediately apparent yesterday either power company was following Gilbertson’s voluntary guidelines.
Earlier, as the voluntary guidelines were introduced, Contact chief retail officer Matt Bolton said, “Contact offers a broadband and energy bundle to provide convenience for customers who want to manage their outgoings in one bill”.
“We aim to ensure that our bundle pricing is competitive to give our customers value for money.”
“We will work actively with the Commerce Commission to ensure customers of bundled telco products continue to get the information they need to make the best decisions for them.”
A spokeswoman for Mercury said, “We welcome the guidelines provided by the commission and are confident that we already comply with them.”
OneNZ corporate affairs head Conor Roberts said the company “supports the outcomes the commission is seeking to achieve around increased transparency to consumers”. 2degrees and Spark took a similar line.
“However, it’s important that the commission works collaboratively with industry on achieving these outcomes to ensure that solutions are practical and deliver genuine benefits to consumers,” Roberts said.
“We already do a lot in the transparency space, including easy- tocompare broadband offer summaries, annual comms to mobile customers about their usage and spend to help ensure customers are on the right plan for their needs, and publishing daily customer service metrics on our website.”
2degrees liked Gilbertson’s focus on monthly average pricing, which it framed as being in sync with one of its ad campaigns.
“Charging every 28 days is poor practice. Ultimately that means some people are paying their telco 13 times a year, and probably think they are only paying 12 times,” a spokesman for the company said.
“The Commerce Commission is right to call this out.”
A Spark spokeswoman said: “We have made a range of improvements to support customers when choosing a plan that suits their needs, including most recently our award- winning Made for You Review programme which uses AI to proactively contact pay monthly mobile and broadband customers to recommend the best plan available based on their needs”.
“As an example, this year customers on wireless broadband plans who acted on their recommended plan change saved approximately $ 15 per month on average.”
Contact and Mercury have been asked for further comment.