Ofcom’s proposals for fairer mobile contracts: the OS view

by Ombudsman Services | Sep 26, 2018

Ofcom has today set out proposals designed to ensure fair and transparent pricing for consumers who pay for mobile handsets and services such as calls and data in the same contract.

The telecoms industry regulator says around two in three pay-monthly mobile customers are on such ‘bundled’ contracts.

It is consulting on two possible options as it looks to “ensure that handset charges are clear and fair – not just when (consumers) enter a contract, but also when their minimum period is up.”

The first option would involve requiring providers to break down the cost of the different parts of the mobile package.

Ofcom says such information should be provided clearly and transparently, at the point of sale and again at the end of the minimum contract period.

The second would impose a requirement on providers to automatically introduce “fairer” tariffs at the end of the minimum contract period.

Under this option, mobile firms would move customers to a different default deal when their minimum contract period ends, so they stop paying for their handset and instead only pay for services such as calls, data and messages.

Another option is for customers to retain the same calls, data and message allowance at the end of the fixed term but pay a reduced tariff – essentially some form of handset discount.

Here at Ombudsman Services we welcome Ofcom’s proposals, which you can read more about in more detail here.

Mike Waldron, an ombudsman in the Ombudsman Services: Communications team, said: “Consumers have a right to expect fairness and transparency on pricing, so they can make informed buying decisions.

“The industry is already starting to make improvements in this area. Too often, however, bundled phone contracts are opaque – meaning consumers don’t know what they are actually paying for.

“In addition, customers are often left paying more than they need to when a fixed term ends. We agree that this needs to change.

“For us, the key point is that consumers shouldn’t have to go to great lengths to find out what they are paying for or establish whether they are getting a good deal.

“The options put forward by Ofcom have the potential to benefit consumers and address some long-standing issues. We look forward to contributing to this consultation.”

Ofcom is seeking comments on its proposals by 7 November. It will then examine responses and evidence before publishing detailed proposals to take forward in 2019.