Telco consumers are the big winners | ACMA

Telco consumers are the big winners

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Australians are saving just over half a billion dollars each and every year as a result of rules introduced three years ago for telecommunications service providers.

The revised Telecommunications Consumer Protection Code (the TCP Code) was registered by the Australian Communications and Media Authority in September 2012 as a key reform to come out of its Reconnecting the Customer (RTC) public inquiry in 2010–11.

‘Since the ACMA shone the spotlight on telco customer service through the RTC inquiry and the registration of the TCP Code, telcos have improved customer service, reduced complaints, ramped up compliance, reigned in unexpectedly high bills and allowed customers to make more informed choices about mobile phone plans and pricing,’ said ACMA Chairman, Chris Chapman (see specific figures below).

Today the ACMA released Reconnecting the Customer—Estimation of benefits report to provide its assessment of the beneficial impacts for Australian consumers from improvements in telecommunications customer service and consumer outcomes from the RTC inquiry, including the TCP Code interventions.

‘The report confirms that consumers now have a lot more money in their pockets due to a reduced likelihood of being on the wrong contract or experiencing bill shock,’ Mr Chapman said. ‘Furthermore, the report goes on to note that the $545 million in annual consumer savings is likely to be spent elsewhere, delivering benefits to other areas of the economy.

‘The report also identifies other benefits to consumers and industry arising from improved customer outcomes,’ he said. ‘For example, enhancing consumer confidence and industry goodwill can promote more business activity, while better quality, timely—and understandable—product information also helps the market function better and promotes competition—a good outcome for any industry.

‘The RTC inquiry and the subsequent development of the TCP Code demonstrates the key role that the ACMA—Australia’s communications sector regulator—plays in identifying areas of consumer concern (harms) and working with industry to deliver solutions. These were solutions that facilitated more informed customer choice, promoted improved service, and encouraged enhanced competition between service providers and confidence in Australian consumers,’ Mr Chapman said.

‘And while the benefits flowing to consumers from these reforms are the result of sustained hard work by the telco industry, there is still a way to go, particularly with the smaller service providers,’ Mr Chapman added. ‘Recently the ACMA issued six companies with a notice to comply with the TCP Code. However, overall, it’s very pleasing to see a general trend of greater compliance over the past few years and reduced complaints to the Telecommunications Industry Ombudsman (TIO).’

For more information see Backgrounder below or to arrange an interview, please contact: Emma Rossi, Media Manager, (02) 9334 7719 and 0434 652 063 or media@acma.gov.au.

Media release 59/2015 - 18 November

Backgrounder

The ACMA’s RTC public inquiry was conducted in 2010–11 against the backdrop of a significant rise in telco consumer complaints (see the chart below).

Figure 1: Trend in complaints to the TIO

mr60-1 png

Since then and with the introduction of a revised TCP Code, the ACMA has undertaken a number of studies to track and test the ongoing effectiveness of the interventions that arose from the RTC inquiry and the TCP Code. These have included:

  • monitoring of industry compliance with the revised TCP Code
  • monitoring consumer complaints and complaints-handling outcomes
  • tracking studies of consumer attitudes and behaviours that have assessed the effectiveness and satisfaction with various RTC interventions, including changes to customer service, product information, the handling of unexpectedly high bills, and the use of spend management tools and alerts.

To complement these studies, the ACMA undertook this benefits assessment to provide a further perspective on the RTC inquiry’s outcomes, including the TCP Code intervention.

Benefits table 

Type of benefit

Estimated annual savings since September 2012

Savings to consumers due to fall in TIO complaints

$3,779,259

Savings from a reduction in the 'wrong contract' problem for post-paid mobile services (18 year old+)*

$92,094,125

Savings from fewer unexpectedly high bills for post-paid mobile services (18 year old+)*

$449,469,632

Total

$545,343,016

*Post-paid mobile phone plans available to people 18 years and older.

The report benefited from a methodological peer review from economics consultants, Frontier Economics. The peer review report can be found in Appendix B of the report.

Last updated: 17 November 2015