Does the telecoms market work for you, or should providers be upping their game? Sharon White, Chief Executive of Ofcom, joins us to outline a view of the current telecoms market and a vision for change.
I joined Ofcom two years ago, and Which? was generous enough to host my first speech. My aim then, as now, was to explain how consumers lie at the heart of everything Ofcom does.
Two years ago we said that broadband and mobile had become essential services. As much a necessity as gas, water or electricity.
We even found that young people would happily do without hot water than be without Facebook (!). Yet around 5% of homes and offices can’t get decent broadband of 10Mbps.
And while mobile broadband is being rolled out, 28% of UK homes and offices can’t get a good indoor 4G signal from every operator.
The government has set out a clear policy objective to widen broadband and mobile coverage across the UK. The Digital Economy Bill includes a new ‘universal service obligation’ (USO) for broadband. The USO complements the government’s pre-existing commitments to make superfast broadband available to 95% of homes and offices by the end of 2017, and to ensure that 90% of the UK has a mobile signal over the same timeframe.
These sit alongside Ofcom rules to ensure that 98% of homes and offices get a good indoor 4G signal from at least one mobile operator, also by the end of this year.
The government has said it will go further, setting out its policy objectives for the whole of the telecoms sector; which I very much welcome.
Regulation in telecoms
Ofcom also has a supporting role through regulation to ensure that people in the UK get the best from their communications services.
Competition brings greater choice, innovation and lower bills. And some in the industry argue that in furthering the interests of consumers, we should limit our activity to promoting competition.
But promoting competition can’t be the sum of our activity, and that’s because competition has its limits.
Firstly, competition is generally lower in rural areas, simply because fewer customers make it hard for operators to turn a profit.
Secondly, while people tend to shop around on price, or for a particular product they like, they don’t tend to make choices based on customer service – allowing operators to get away with poor service.
Thirdly, millions of consumers, particularly vulnerable and elderly people, don’t shop around at all.
This has created a widening gulf between expectations and what the industry is actually delivering.
Which? has found that certain telecoms providers dominate the list of worst-rated companies for customer service – behind even some banks. This should be a concern for us all.
Which?’s new campaign, Fix Bad Broadband, rightly highlights one particular failure – the mismatch between the speeds people think they are buying, and what they actually end up getting.
Ofcom has three important roles beyond competition:
- empowering people so they can make informed decisions;
- protecting consumers, especially those who are vulnerable;
- and taking firm action when providers fail their customers.
We will empower consumers with better information, protect those who are failed by the market and take action against companies who fail their customers.
But ultimately, we want to see a cultural change in the telecoms industry. We want all operators consistently to put customers at the heart of their businesses.
A successful telecoms market should mean Openreach, not Ofcom, setting its own stretching service standards. Automatic compensation should rarely be necessary, because there are few failures in the first place. And fewer fines issued, because companies routinely put their customers first.
I appreciate that there’s a long way to go. But with commitment from the industry – and appropriate action from the government and the regulator – things can get better.
This guest contribution is from Sharon White, Chief Executive of Ofcom, and taken from her speech at an event with Which? on 12 April 2017. All views expressed here are Sharon’s own and not necessarily those shared by Which?.