Commission Completes Review Of Consumer Mobile Phone Bills

The Commerce Commission has published a letter confirming it has completed its review of consumer mobile phone bills along with updated analysis addressing feedback from the telecommunications industry.

In September 2020, the Commission published an open letter to Spark, Vodafone and 2degrees asking them to share their plans for providing their customers with more meaningful product and service comparisons and to guard against overspending. This was accompanied by a report from Schiff Consulting, aspects of which were later contested by the industry.

In response to industry submissions Schiff Consulting has now refined the ‘right planning’ aspect of its analysis for some customers who used less than their quota in every month.

This refinement results in an estimated one in seven postpaid consumers saving an average of $18.28 a month compared with the original analysis of a quarter of postpaid consumers saving an average $11.60 a month. This is a decrease in the number of consumers who could potentially save money by switching, but an increase in the total average saving.

“We appreciate the industry feedback and consider that the updated analysis, alongside our wider understanding of pain points, continues to support our conclusion that transparency and inertia issues warrant action. The changes to the analysis broadly offset each other, leaving our overall conclusions in relation to potential savings for consumers unchanged” says Telecommunications Commissioner Tristan Gilbertson.

“The review of the bills of nearly 80,000 mobile consumers has provided a valuable snapshot of the extent to which consumers’ purchasing decisions match their usage and how much they could save by switching plans or providers,” Mr Gilbertson says.

On 9 March 2021, mobile network operators and the Telecommunications Forum agreed to implement a range of measures to provide consumers with greater access to and transparency of spend and usage information.

“We welcome the industry’s commitment to implementing these measures and will monitor the delivery of them as part of our ongoing programme to improve retail service quality for consumers,” Mr Gilbertson says.

“We appreciate the constructive engagement we have received from the industry on our review and look forward to seeing the agreed transparency initiatives implemented during 2021.”

The close out letter, submissions received on the mobile bill review and Schiff Consulting’s updated analysis can be found on the Commission’s website.
 

Background

The Commission’s work programme to improve retail service quality for consumers is made possible by 2018 amendments to the Telecommunications Act. These changes are intended to increase consumer safeguards and provide more regulatory oversight of retail quality standards and dispute resolution processes.

The Commission commenced the mobile bill review in May 2019 seeking to better understand the usage and expenditure patterns of residential consumers in the mobile market and the extent to which these consumers could save money by changing their purchasing behaviour. The review analysed an anonymised random billing data sample of nearly 80,000 mobile consumers, looking at the consumers' usage and spend for the 12-month period between September 2018 to August 2019.

On 9 March 2021 the three mobile network operators agreed to provide at least 12 months’ usage and spend information to their customers; an annual usage and spending summary including a prompt to consider whether they are on the right plan; and promote the development of comparison tools including a prospective consumer data right to make it easier for customers to compare plans and providers.

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