Friday, December 14, 2018

Ofcom Wants Customers to Get Best Price

Unless they work at it, most consumers are probably unaware whether they are getting the best deal on their mobile or fixed network services, when not under contract for those services.

That can result in an anomaly: the more-loyal customers pay more for the same services than new customers just acquired on promotions.

Ofcom notes that out-of-contract prices vary based on the type of products purchased.

Mobile phones and subscriber identity modules, as well as fixed network voice prices, can range from six percent (fixed network voice) to 27 percent lower when contracts have expired.

But costs for out-of-contract dual-play or triple-play services on fixed networks can range between 19 percent and 26 percent higher, Ofcom notes.


That is the backdrop for possible Ofcom action requiring that service providers notify customers when their contracts have ended, as well as notifying such customers of the best prices available for the types of service they already are buying.

In some other markets, the potential for overpayment has been largest in instances where mobile handset sales are bundled with service contracts, when those service contracts continue even after the handsets have been paid off.

That is less a problem in markets where most handset sales are separate from service charges, of course, and where device installment plans are separate from service plan contracts.

There also is more transparency, and greater freedom to choose, when no service contracts are a typical retail billing practice.

The Ofcom proceeding is just one more example of why average revenue per user or account keeps dropping in the connectivity business. In addition to government-mandated actions that reduce consumer prices,  competition and new technology, plus changes in end user demand, combine to push prices lower over time.

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