18 Sep 2020

Industry body sees the bright side in ComCom's open letter on telcos

7:52 pm on 18 September 2020

The industry body representing telcomunnication companies is pushing back against suggestions that consumers are being overcharged for mobile plans they do not need.

Commerce Commission

Photo: RNZ / Alexander Robertson

The comments come after the Commerce Commission published an open letter, telling Spark, Vodafone and 2degrees they needed step in to stop customers spending more than they need to for mobile services.

The commission reviewed 80,000 consumer bills and found about a quarter were on mobile plans that cost more than the actual usage was.

The research showed that two-thirds of consumers did not change plans during the 12 month review period and found that 7 percent of all residential customers could save an average of $48.65 a month if they switched to a more appropriate plan.

"We want to see the industry catch up to other sectors, like electricity, where consumers and comparison websites are making good use of the ability to compare usage and pricing," telecommunications commissioner, Tristan Gilbertson said.

"We expect the operators to address these issues by increasing the usage information available to consumers and implementing measures to help keep consumers on plans that best reflect their actual requirements."

The commission wanted the industry to improve transparency, empower customers to make better choices and asked the Telecommunications Forum (TCF) to look at the possibility of an industry wide consumer data right.

However, the forum's chief executive, Geoff Thorn, questioned the conclusions the commission drew from the data.

"[The data shows that] about a quarter of people could be on a different plan but that also indicates that three-quarters of consumers are actually on a plan that suits them.

"You cannot just make assumptions about what plan consumers are on, they will choose a plan for a whole range of reasons."

He said the high churn rate in the industry suggested consumers were already shopping around to find themselves the best deals.

"At the end of the day you've got to look at the overall picture that the letter provides, we welcome the letter and we will work with the commission and the TCF will work with the industry to see how we can improve transparency but when you look at the level of churn across the industry, 36 percent of consumers are churning - that's a huge number...which indicates it's quite a competitive industry.

He said the TCF had not yet looked at introducing a consumer data right into the industry, but it was something it would consider and would work with the commission on.

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