The Commerce Commission will require more clarity from telecommunications on their pricing and advertising.

 

The Commerce Commission has issued new draft Guidelines that would require telecommunications providers to improve transparency about their prices and services so that Kiwis can make more informed comparisons and decisions. 

Tristan Gilbertson – Telecommunications Commissioner – says mobile coverage maps conflict one another across providers and thus, consumers cannot make clear comparisons. 

“Coverage differences matter – especially for rural consumers or people travelling or commuting,” he says. “Knowing what real-world coverage they can expect from different providers and technologies is important – especially with 5G roll-out and competition heating up.”

Mr Gilbertson wants consumers to be able to understand and compare offers between providers in different areas of the country. He urges providers to standardise maps and uphold accountability of their coverage claims when mishaps occur.

He believes that consumers should not be penalised for leaving providers when said services do not match the advertised offer. "When consumers run into real world coverage problems – compared with what's presented in computer generated coverage maps – they should be able to walk away from their service without penalty."

The draft Guidelines also tackle broadband and mobile advertising, requiring providers to include a monthly average price in their campaigns. Thus, it should make it easier for consumers to understand the offers and compare them with clarity. 

“Consumers find it difficult to navigate different combinations of billing terms, discounts, and promotions. We want providers to cut through the complexity by disclosing upfront how much consumers will pay each month for a particular deal,” Mr Gilbertson says.

He believes that clarity and knowledge is the best way for consumers to make decisions.

“Our work shows that consumers find it easier to shop around when they know how much they’ll be paying on average each month – so disclosing this upfront will reduce uncertainty and enable more meaningful comparison and choice.”

The draft Guidelines also propose:

• Declaring the total minimum cost of an offer over the term of the contract when consumers sign up. 

• Standardising how providers inform consumers about contract early termination fees at sign-up and on their bills; and

• Establishing standardised offer summaries so that consumers can easily compare providers and plans.

Service offers don’t tend to detail the total term cost of the contract nor the cost for a consumer leaving the plan. “It’s important consumers have this information from the outset so they know exactly what they’re signing up to,” Mr Gilbertson says. 

The Commission has spent the past year consulting to pinpoint the areas where consumers do not have access to certain critical information. Better information will empower them to make more informed decisions. The Commission has also identified the best way to get this information from providers. 

Background

The Commission’s ongoing efforts to promote better quality retail service in the telecommunications industry are shown in these draft Guidelines. Their continuous work addresses pain points of consumers. 

Customer dissatisfaction and complaints are influenced by a lack of comprehensive information about their providers and services, thus, making it difficult to compare costs, prices and coverage offer. 

The Commission has spent the past year designing proposals that aim to make it easier for comparisons, in conjunction with industries and consumer groups. To develop this, the Commission has consulted and engaged with stakeholders several times. This included a consumers survey that resulted in over 1000 responses and consumer research to compose the proposals. 

The Commission now seeks perspective and opinion from industry and consumer group stakeholders on draft Guidelines to contribute to proposals in response to this process.

The Commission has already made efforts that have improved the quality of the retail service landscape:

• Dispute Resolution Scheme – Advancing the effectiveness of the industry dispute resolution scheme for consumers who encounter issues with their providers.

• Mobile Transparency – Ensuring customers know that they are on the best mobile plan for their needs and budget.

• Broadband Marketing – Ensure the marking of broadband services includes the likely actual peak time speeds in their campaigns (instead of “up to” speeds or hypothetical maximums. Marketing must also include the ability for consumers to leave service plans without penalty if the service does not provide what was advertised.  This ensures provider accountability.

• Customer Service: Making it easier for consumers to see different provider offers and performances, while encouraging providers to improve their customer service support.

• Bundles: Requiring providers to disclose when energy costs more in a bundle compared to that of a stand-alone plan. This enacts transparency between customers and providers. 

As a business who positions the Kiwi consumers right to choose and making fully informed decisions - NZ Compare are pleased and encouraged to see this change and push come from our partners and the Commerce Commission.