Carphone endorses Ofcom switching changes

Carphone endorses Ofcom switching changes

Carphone Warehouse who stated the current arrangement is a ‘barrier’ for customers has endorsed Ofcom’s proposed changes to PAC switching procedure.

 

The proposed changed lay the onus on whomever wins a customer’s business to deal with their previous supplier in order to port their number across. The regulator’s intentions are to both simplifying the process for the customer and get rid of billing overlap (where a user is billed by both operators for the same period). Ofcom hopes by incentivising switching, the churn rate can be brought in line with other utility and communications sectors, and drive competition.

 

11 million customers switched networks in 2015, taking 2.4 million hours of their time to do so according to uSwitch. An OC&C survey found that 49% switched provider due to a better deal.

 

Steve Bell, commercial marketing director for Carphone Warehouse said, “As the UK’s only independent mobile retailer we’re in a unique position to help millions of customers navigate the complexity, hidden costs and hassle of switching network. We’ve got a great relationship with all our network partners and we are more than open to working with them to help improve the current process as we strongly believe it could be better for consumers.

 

Three is the only UK network to endorse the changes. Danny Dixon, Three’s director of customer strategy told Mobile that the changes would make the network push its messaging around competitive pricing and data ‘even harder.’ He added, ‘when there are low barriers, it means operators need to up their game in terms of price, proposition and customer experience.’

 

Meanwhile in the comparison and MVNO space, Unshackled.com, a site set up by Phones 4u giants John Caudwell and John Whittle, also wants to see switching simplified with Whittle telling Mobile, ‘Tariffs are complicated and customers are unclear on how much data they use – so they are unsure of the best alternative when switching.’ He also added that any changes are likely to increase price competition, forcing operators to look for revenue in other areas.

 

Not everyone in the industry agrees. O2 told Mobile back in November that, ‘Overall, the current switching process appears to work for the vast majority of customers, but we welcome dialogue with Ofcom on were improvements can be made. For there to be a big move to change processes and systems to ‘recipient led’, there needs to be confidence that the benefits outweigh the costs – and deliver a better experience for customers.’

 

BT and EE also sent Mobile a joint statement explaining, ‘We welcome Ofcom’s consultation into mobile switching. However, given the market changes afoot, we urge Ofcom to take a holistic approach so as to develop processes which works in a converged world, and makes switching bundles quick and easy for consumers, rather than focusing on mobile and triple play switching in isolation.’

 

Analysis

The sides on switching can be roughly split with the latin adage cuo bono? (‘who benefits?). For challengers fighting to grab market share or supposedly network agnostic comparison sites, simpler switching means more revenue, despite the costs it may put on them for actually porting the numbers. For them the battle for switching is a noble consumer campaign with the interests of the consumer at heart but their own financial interests in mind.

 

On the other side sits the giants looking worriedly at falling ARPU and their sacred low churn rates. For them, the switching changes are naïve, it makes all the right noises but the numbers (the costs of switching, the threat of mis-selling, the impact on revenue models) just don’t add up. They see themselves as the old and wise veterans who also have the consumer interests at heart but their own financial interests in mind.

 

Which side wins lies in the hands of Ofcom, who may weigh up the impact of this in line with the other operator plates they’ve got spinning, such as the spectrum auction, Brexit preparations and their hand in the Digital Economy Bill.

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