Commerce Commission tells telcos to improve consumer choice

Mobile operators should improve consumer choice through easier comparisons, according to the Commerce Commission.

The Commission has told New Zealand's three mobile network operators that they should provide more meaningful comparison information and guard against overspending by mobile phone consumers.

The Commission this week published an open letter it sent to Spark, Vodafone and 2degrees outlining its review of nearly 80,000 consumer mobile bills, which followed on from its 2019 study into the state of competition in the mobile market.

The mobile bill review found 64% of consumers did not change plans during the 12-month review period. It found a quarter of post-paid consumers could save an estimated average of $11.60 a month by moving to a cheaper plan that would still cover their usage. It also found that 7% of all residential consumers spent a relatively high amount on mobile services, given their usage, and that these consumers could potentially save an average of $48.65 a month.

"Our work suggests that some consumers are significantly overspending on their mobile plans due to transparency and inertia problems in the market," says Telecommunications Commissioner Tristan Gilbertson.

"We want to see the industry catch up to other sectors, like electricity, where consumers and comparison websites are making good use of the ability to compare usage and pricing," he explains.

"We expect the operators to address these issues by increasing the usage information available to consumers and implementing measures to help keep consumers on plans that best reflect their actual requirements.   
"This will improve transparency, empower consumers to make better choices and guard against overspending," Gilbertson says.

The Commission has also encouraged the wider industry to initiate a programme of work on a consumer data right so consumers can choose to share their usage, spend and product information with competitors and comparison services to help inform their decisions. The Commission has asked the industry body, the Telecommunications Forum, to look at an industry-wide initiative in this area.

"We've identified important opportunities for the industry to step up to improve consumer outcomes," Gilbertson says.

"We'll review the industry response in our Retail Service Quality work programme, which is focused on addressing key customer pain points across the industry as a whole, with a view to taking more active measures if required."

Gilbertson says the mobile bill review showed that consumers who proactively manage their mobile plan are better placed to match their usage and spend.

"The Commission is working with advocacy groups to raise awareness and support consumer choice.

"Our work shows that consumers need to ask themselves how much money they could be saving.  Most mobile plans can now be changed monthly so it just might pay to shop around to see if you can find a better deal."