The debate: Is Ofcom right to simplify switching?

The debate: Is Ofcom right to simplify switching?

Ofcom is considering changing the PAC porting process so that whatever network wins a customer's business is responsible for liasing with their old supplier to get the number switched and ensure there's no double billing. Chris and Jack took opposite sides in this month's debate to show the different viewpoints on the issue.

 

 

Yes – Chris Jenkins, features editor, Mobile

 

Mobile switching is an issue that is causing real harm to customers, and Ofcom is doing no good by dragging its feet over consultations. The process goes back to July 2015, and was extended to 2016 after the mobile providers’ responses, and has now beenfurther extended, to allow them to comment on Ofcom’s cost estimates and reform proposals.

 

 

These proposals sound reasonable and affordable. Ofcom wants to automate the current PAC process, or require the gaining provider to coordinate the switch (GPL); it wants to address loss of service during switching by ensuring the management of the activation (CPS); and it wants to avoid risks of double paying because of providers demanding notice periods.

 

 

Ofcom’s estimated 10-year costs to the industry don’t sound outrageous either; £47.8m for Auto-PAC, £47.1 million for GPL, £36.4m for end-to-end management, and £6.8m for not charging beyond the switching date.

In response, Three, TalkTalk, and consumer groups broadly support most of Ofcom’s proposals; but Virgin thinks they’re out of proportion to the problems, and that results might be achieved faster and cheaper using different methods.

 

 

Telefonica believes the system’s working well for most customers, and thinks Ofcom’s proposals risk an increase in slamming, mis-selling and fraud. BT/EE believes that mobile switching has been refined over the years so that it now works very well for consumers, and meets Ofcom’s criteria– so there is ‘no case for immediate action’.

But the naysayers are fooling themselves – the recorded levels of switching complaints received by Ofcom and the telecoms ombudsman are just the tip of the iceberg, and the industry is on a collision course unless it takes avoiding action soon.

 


No – Jack Courtez, news editor, Mobile

 

The main arguments in favour of switching are ease of user for consumers and encouraging more competition to win and retain business. However, not only is there questionable evidence that the proposed changes to the PAC porting process suggested by Ofcom are necessary, there’s also the chance that it will make things worse for consumers.

 

Changing supplier can be a little tedious, but often it actually gives the current supplier a chance to provide a counter-offer, therefore actually increasing competition. Not only this but 10% of users switch mobile operator each year and 94% say that switching was fairly or very easy. Sure, this 10% is lower than the electricity market (27%), but when you consider that many mobile customers are locked in to 24-month contracts due to the value of the devices, it looks a lot more comparable.

 

By trying to shape the mobile supplier model into the gas and electricity suppliers’ model on switching, Ofcom does a great disservice to mobile operators, ignoring that often their relationships with customers are far deeper, often including additional services such as membership schemes, content services and even educating users about the technology in thousands of stores up and down the UK.

 

Finally, pushing providers into going after acquisition rather than retention can have unexpected consequences. Looking back at the shark-like selling techniques that occurred when mobile was in its boom time, it’s easy to see where Telefonica’s concerns about ‘slamming’ (switching a user without their permission, or mis-informing them) comes from.

Comments

Switching mobile providers should be a smoother operation. The PAC process was great at a time when switching was a lengthy 30 process of yesteryear. ...
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