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February 12th, 2016

Ofcom’s Consumer Experience Report: A Reflection

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Estimated reading time: 5 minutes

Blog Administrator

February 12th, 2016

Ofcom’s Consumer Experience Report: A Reflection

0 comments

Estimated reading time: 5 minutes

roger darlingtonRoger Darlington is Chair of the Consumer Forum for Communications and attended this week’s launch of Ofcom’s Consumer Experience report for 2016.

There is definitely a change of thinking in Ofcom about the length of publications. Last year’s draft Annual Plan was 81 pages but this year’s is only 29 pages. Last year, the Consumer Experience research report was 242 pages and the policy evaluation was 124 pages – a total of 366 pages. This year’s Consumer Experience research report is 74 pages and the policy evaluation is 20 pages – a total of just 94 pages.

The Consumer Experience publication is not just shorter; there are also some presentational differences. One innovation is the creation of a dashboard of data for the last three years that highlights statistically significant variations (increases in green and reductions in red). However, none of the variations are dramatic.

There is some good news in the research:

  1. An increase in the proportion of engaged consumers in the broadband and television markets
  2. An increase in switching levels in the fixed line and mobile markets
  3. More consumers taking up an offer of extra or improved services than have switched provider

But there are a few areas of concern.

The overt problem is around trends in prices:

  1. Line rental prices have been steadily increasing because of falling fixed voice use and a move from usage-based pricing to access-based pricing. Those who lose out are the 10% of consumers who only have a fixed landline, most of whom are with BT.
  2. There has been an increased focus on promotional discounting, creating a gap between promotional and standard prices of on average 20%. Those who lose out are consumers who are not engaged with the market, especially older and poorer consumers.
  3. There is increasing complexity in pricing which can lead to poor decisions. Again those who lose out are consumers who are less engaged or those who are experiencing a vulnerability.

Most of the Ofcom initiatives in response to these price trends involve collation and presentation of information, but I am particularly interested in the suggestion that the regulator will examine whether specific protection for standalone landline consumers is merited.

As well as the overt problem of prices, there are some covert problems hidden in the research data:

  1. Overall satisfaction is high, but in particular markets satisfaction has fallen: in the fixed line market from 91% to 88% and in the bundle market from 90% to 85%.
  2. Consumers initially say that they find switching easy but, when prompted, reveal that they often experienced difficulties.
  3. Of those consumers who said they had a reason to complain, around one-third did not actually complain. In the broadband market, 12% could have complained but only 8% did so.

These covert problems underline that research needs to look not just at what consumers say in general but what they say in particular and not just at what they say but at what they do.

Now when we see the publication of Ofcom’s initial conclusions document for its Strategic Review of Digital Communications, we will know what measures are proposed on the supply side of the regulatory equation, especially around the status and role of Openreach.

Meanwhile, as regards demand-side activities, Ofcom has made some useful progress on switching for voice and broadband and I look forward to progress in regard to switching in mobile and triple play. But so many demand-side measures revolve around the provision of information by Ofcom and the regulator publishes enormously helpful data on coverage, performance, quality of service and complaint levels. But I have some fundamental questions for Ofcom:

  • What proportion of consumers are aware that this sort of information is available and know how to access it?
  • What proportion of consumers actually do access and use this information and in what way do they use it?
  • Does Ofcom have any metrics for the number of visits to relevant web pages and the annual growth it would like to see?
  • How effectively is Ofcom using online methods other than its web site to engage with consumers, such as social media and local media?
  • What offline communications methods is Ofcom deploying to ensure that consumers – especially those not on the Internet or lacking confidence in using the Net – know how to engage in the market?

This article was originally published on Roger Darlington’s CommsWatch blog and is reproduced here with permission. This blog gives the views of the author and does not represent the position of the LSE Media Policy Project blog, nor of the London School of Economics.

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Posted In: Broadband | LSE Media Policy Project | Telecoms

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