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Putting the spotlight on mobile network performance

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Melbourne, 8 October 2013

The ACMA has responsibility for an enormous and diverse range of matters.  Today I’m going to focus on telecommunications consumer issues, with a review of current status and a bit of looking forward.

While many of you will be interested in spectrum management, the ACMA held its 2013 RadComms conference just last week to canvass the whole range of our spectrum activities and I won’t revisit them today. Also, in September we released the 5th edition of the Five-year Spectrum Outlook for the period 2013-2017.

The Outlook continues to be our flagship publication on spectrum management, providing analysis of spectrum demand pressures, key issues affecting spectrum management and thoughts on dealing with these issues.

A key priority for the ACMA is to increase the focus on our ongoing spectrum reform agenda and review of the spectrum management toolkit, to streamline regulation and ensure that it is effective for the future. So we encourage you to provide your views and commentary on the Outlook to the ACMA by 20 December 2013 to help inform the ACMA’s management of the radiofrequency spectrum.

TCP Code protections and the ACMA’s compliance activity

It is now just over a year since the revised Telecommunications Consumer Protections Code was registered by the ACMA. The revised code has delivered improved protections for consumers following our Reconnecting the Customer public inquiry. It improved the rules around advertising, information provision about offers, spend monitoring tools and complaint handling.

Before I comment on industry’s compliance with these rules, the ACMA does note some signs of transformation in the industry which go beyond code compliance. In particular, we are delighted to see real industry responses to various forms of mobile bill shock.

Bill shock has been most common for mobile services because of the charging structures which have seen dramatically higher charges commonly imposed for ‘out of plan’ usage. By contrast, in the fixed internet area, shaped data plans have long been widely available and have been embraced by consumers. 

We have noted that Optus recently introduced new plans for mobile services, which, instead of imposing excess usage charges when a plan limit is reached, move the customer up to the next level of plan for that month. So ‘the bill shock’ is limited to an increase in bill for that month from $50 to $60 or $60 to $80 rather than hundreds of dollars. In the area of International Mobile Roaming, we also note that Vodafone and Optus have both recently introduced new offers which dramatically reduce the cost of roaming to customers travelling to particular destinations. These changes suggest important progress and a fresh focus on improving the consumer experience.

As for compliance with the Telecommunications Consumer Protections Code, the news there is also good.

Critical Information Summaries

The ACMA’s most intensive compliance work has concerned Critical Information Summaries.

Critical Information Summaries contain important pre-purchase information about telco offers. They aim to help customers understand and compare similar offers to assist them to make effective and informed choices about telecommunications products and services best suited to their needs and budgets.

The ACMA has reviewed 180 offers providing landline, mobile and internet services with the overwhelming majority of providers either having a CIS for these offers, or having one in place soon after being contacted by the ACMA.

Where a rapid response to identified non-compliance in this area has not been forthcoming, we have taken enforcement action. Five formal warnings and two directions to comply with the Code have been given to providers.

Advertising

The ACMA has been monitoring ads to ensure certain terms such as ‘free’, ‘unlimited’ and ‘cap’ were not used in a misleading way and to ensure that standard charges are included in ads.  We are discussing some shortcoming in the code provision regarding the use of ‘unlimited’ with Communications Alliance.  Since the introduction of these strengthened advertising provisions, around 60 advertisements have been assessed – both online and print – for compliance.

Generally, we have found a clear improvement in compliance with the advertising requirements over the past year. Most industry providers have responded to the revised Code by incorporating the necessary elements in their advertising content. There has been very strong compliance with rules requiring standard charges in advertisements for ‘included value’ plans, clear language and avoidance of misleading terms.

However we will continue our compliance monitoring and the ACMA will take action where warranted. For example in May the ACMA issued Vodafone with a formal warning for not prominently displaying its standard charges in a mobile phone offer. This was acknowledged and quickly rectified.

Communications Compliance non-lodgers

One of the most positive features of the TCP Code was the establishment of Communications Compliance. Compliance was a problem with the old code, and the industry taking responsibility for it in the first instance is a great step forward.

Suppliers bound by the Code were required to lodge compliance documentation with CommCom by mid April 2013.  Pleasingly, the suppliers who lodged documents represent 223 companies encompassed well over 95% of Australian customers and more than 99% of complaints lodged with the TIO.

In order to support the industry’s initiative and the work of Communications Compliance, the ACMA identified around 180 providers who should have lodged compliance documents but did not. After corresponding with these providers, the ACMA is finalising its compliance approach for this group and will announce our finding shortly.

Upcoming compliance priorities

Currently our major TCP Code compliance priority involves monitoring the introduction of the Code’s required usage alerts at 50%, 85% and 100% of mobile and internet allowance. Stage 1 of these rules, for data and large provider’s voice and SMS services commenced last month. Stage 2, for smaller mobile providers’ voice and SMS, commences September 2014.

We will also be monitoring compliance with the recently introduced International Mobile Roaming Standard. This Standard offers significantly better information for those travelling overseas to help them avoid bill shock.

All customers using roaming services are now sent warning SMSs from their network carrier that they are roaming and significantly higher charges may apply. Customers who use mobile services from ‘the big three’ providers - and travel overseas – now also receive SMS information about costs.

From September 2014, customers of the ‘big three’ will also receive usage alerts for data roaming, which is the biggest cause of, or the cause of the biggest bill shocks.

Customers who use mobile services provided by re-sellers won’t be notified of the roaming costs and spend management tools/alerts just yet.  These requirements for resellers won’t start till May 2016. There are technical reasons for this, and certainly the ACMA and those providers’ customers would be very happy to see earlier progress on that front.

However, these re-sellers are required to immediately comply with obligations to provide their post-paid and automatic pre-paid customers with pre-departure information about costs and ways to opt out of roaming. We will be closely monitoring compliance with these requirements over the next couple of months.

Our other identified priorities for 2013-14 include unauthorised transfer, unauthorised direct debits and active provision of Critical Information Summaries.

Mobile Network Performance Forum

In April this year our Chairman, Chris Chapman, announced that the ACMA would be commencing a conversation with industry and consumers to improve the transparency of information about mobile network performance. The ACMA does not have a preconceived view of what the problem is (if any) or a view of whether any action is needed at all.  However one reason for this initiative is the continued prominence of mobile performance issues in the TIO’s complaint numbers.

We are therefore now seeking to understand the causes of this rise in mobile network performance complaints. Do the complaints indicate a systemic problem?  If so, will the market deliver solutions or should regulatory interventions be considered?

The increasing complaint numbers suggest that, at the very least, consumers’ expectations of network performance are not aligned with their experiences of network performance. As Australian citizens become increasingly dependent on mobile communications, it is important that mobile services meet the reasonable social and commercial needs of the Australian community.

Our own research, and that of others, identifies a number of factors likely to have contributed to increasing demands and expectations of mobile networks:

  • High concentration of smartphone ownership;
  • Growing mobile internet subscriptions, driven by significant rises in tablet ownership;
  • Growing numbers of mobile-only users, which rose by 20% in the 12 months to December 2012; and
  • The increased volume of data downloaded by Australian wireless broadband and mobile handset users.

It is worth noting that for its part the ACMA continues its work on spectrum for mobile broadband to meet the growing need for faster, greater coverage mobile broadband services. Making the digital dividend available for next generation mobile broadband services will have helped.

A priority for the ACMA in the next decade will be making increased spectrum available to meet this unprecedented demand for mobile broadband and next generation services. We take a long term view on the issue, releasing in 2011 a discussion paper Towards 2020—Future spectrum requirements for mobile broadband which focused on the need to identify the baseline spectrum requirements for future mobile broadband services, while taking into account the needs of incumbent services together with those vital passive and sensing uses of spectrum. We released a summary and initial response to submissions in January 2013 and continue this work as part of our mobile broadband project.

In respect of the more immediate question of the user experience of mobile network performance, I am releasing today an ACMA discussion paper about Mobile network performance, which is intended to provide thought provoking information about the consumer experience of mobile broadband to stakeholders.

We are releasing this discussion paper in advance and in support of our public ACMA forum on the topic. It poses a number of questions to help identify areas of focus for discussion that can be more fully explored at the forum, which will be held here in Melbourne on 14 November and webcast nationally.

The paper explores:

  • The factors that shape consumer perceptions of good and bad mobile network performance;
  • Key technical aspects of mobile performance and network management;
  • The information currently available to Australian consumers about the performance of mobile networks.

I should note what the forum is not intended to address:

  1. The subjects of coverage and infrastructure. These may arise in discussion of the causes of performance complaints, and indeed there are links between coverage and performance (for example, where cell density does not meet demand in a certain location at a point in time). However, the ACMA has no powers to direct providers to extend terrestrial mobile network coverage and consequently forum outcomes will be unable to, for example, demand infrastructure improvements or “new build” to extend coverage; or
  2. The impact of mobile infrastructure on communities. Under the Mobile Phone Base Station Deployment industry code the ACMA deals with complaints about the placement of mobile base stations. However, the Conversation will not be addressing these matters since this does not fall within our focus on information for consumers about network performance.

And that is where the emphasis lies: on information for consumers about network performance.

I encourage you to consider the paper and participate in the event in November. Further information can be found at www.acma.gov.au/mobilenetworkperformance.

RTC consumer information program

The Forum will bear the Reconnecting the Customer label, and I’d like to put it in that context for you.

In 2010 and 11 the ACMA conducted the Reconnecting the Customer inquiry, publishing its final report in September 2011. Registration of the new TCP code followed in September 2012. A key focus of both was improving the information available to customers, empowering them to make wise choices of carrier and service.

Secondly, in June this year the ACMA made the new International Mobile Roaming standard, so that customers might be fully informed of the facts about using their mobile devices while overseas, before getting any nasty surprises.

Thirdly, and on the other side of the coin and also this year, the ACMA publicly committed to a review of legacy – and possibly no longer useful - information requirements with which providers are obliged to comply.

I will talk about this more in a moment, but only last week, for example, Chris Chapman and I signed the Telecommunications Service Provider (Premium Services) Revocation Determination, removing the requirement for providers to give information to their customers every two years about the financial risks associated with the use of premium voice services.

There has been a decline in the market for 190 services, with the demand for such services having largely migrated to mobile and online. At the same time, there has also been a significant reduction in consumer complaints and detriment arising from premium voice services. The Authority determined that the correct balance lay in the removal of these requirements.Of course, the Mobile Premium Services protections remain in place.

Fourthly, we have our information-focused mobile network performance forum coming up in November.

This ongoing program of work is all about the quality and timeliness of meaningful information for Australian telecommunications users.  This program will continue.

RTC Newspoll research

In February this year, we commissioned Newspoll to undertake a national study into the current state of the telecommunications customer experience more generally.

The study comes at a time when the TCP Code changes begin to take hold. The study is planned as the first in a series of similar surveys tracking changes in customer experiences on issues addressed by the RTC Inquiry. The initial research will be progressively released later this year but today I can share some early impressions from what customers told us.

Our research has found that:

  • Half of all telco bill payers have contacted their service provider in the past 6 months;
  • 7 out of 10 customers who contacted their service provider in the last six months were satisfied with the customer service they received for their most recent issue;
  • There is a strong link between satisfaction and the timing and resolution of complaints: that is, the longer a complaint takes to resolve, the lower the customer satisfaction. Customers whose issue was resolved on the first contact (whether a complaint or not) were more likely to be satisfied and have a higher level of satisfaction.
  • About a third of customers made a complaint about their telecommunications service in the last 12 months. Faults and technical issues were the most common cause of complaint, followed by billing then coverage issues.
  • However only about 1 in 2 people whose most recent contact with their provider was a complaint felt satisfied with the customer service they received.
  • Although most customers (82%) who were offered some solution to their complaint by their provider felt that the solution was fair, just over a quarter (27%) reported that their complaint was not resolved.

We are continuing to consider the study results and will comment further later in the year, but meanwhile the findings to date confirm the need for the ACMA to focus on monitoring complaint handling outcomes of providers as they seek to improve their customer facing operations.

Working with industry

The Reconnecting the Customer inquiry into customer service in the telco sector set the scene for the industry revision of the TCP code. The ACMA had concluded that co-regulation had not been working effectively in the interests of consumers in an increasingly complex environment of platforms, products, services and suppliers.

With intensive work by all parties we have, together, made the co-regulatory system work as it was intended – in fact perhaps it would not be too strong to say that we have collectively dragged it back on track. This is then consistent with our over-arching aspiration to proceed with regulation that is ‘fit for purpose’, with interventions that are enough to do the job in a specific circumstance, and no more.

In another example of our ‘fit for purpose’ thinking, late last month we released our Partnership Principles, used to help determine whether some of the services for which the ACMA has responsibility might be better or more efficiently performed by an external provider.

Any move to external partnering should ensure these outcomes:

  • Securing the ACMA’s key functions
  • Improving the quality of service provision
  • Increasing the cost effectiveness of service provision.

Prominent examples of customer and citizen services that the ACMA has outsourced and which are now undertaken by third party providers include:

  • Maritime and Amateur Radio Operator examination and certification services by the Australian Maritime College and the Wireless Institute of Australia, respectively
  • Frequency Assignments by Accredited Persons
  • Do Not Call Register operation and management
  • Some numbering allocation by Industry Number Management Services (INMS).

Most recently, the principles have been used to help assess the merits of the ACMA transferring more of its telephone numbering administration services to an external provider. Close consultation with the industry on this subject is under way.

We noted on the release of the Partnership Principles that self and co-regulation place appropriate responsibility on an industry sector for developing regulatory arrangements, while the Partnership Principles provide guidance as to where it might be prudent for the ACMA to allow an external provider to deliver a customer and citizen service. In other words they are both important parts of our framework for working with industry.

In this context the ACMA is more than open to the notion of reducing red tape in regulation.  In our first 8 years the ACMA, as the converged regulator, has worked first hand with a large suite of complex sector-specific legislation and regulation which has been incrementally updated over the years. However, each often takes a different approach to the same issue and some cases there are indeed unnecessary burdens on industry.

While we do consider that there is a case for change, the ACMA continues to work successfully within this framework and is committed to finding process improvements which in their own way can have quite profound impacts, for example, in Radiocommunications and technical regulation. We will continue to contribute to the wider debate about regulatory reform in media and telecommunications more generally.

Telco info requirements review

Our commitment to information requirement reform is a recent example of red tape reduction. I refer to the collection of legacy information provision requirements for the telecommunications industry, whereby rules exist that require carriage service providers to make information available to consumers on a vast array of topics.

These requirements often lack specificity about timing or method. As a result, it is not clear that they are effective consumer protection tools and are often an unnecessary regulatory overhead.

An invitation has been extended to industry to engage with the ACMA about these legacy information requirements and I can confirm today that we are willing to formally include it in our work program for the back half of this calendar year. We have asked the industry to tell us what it thinks is unnecessary. Once we get that list, we will add it to our own and be in a position to tailor our response.

More effective and better targeted information provision will be a key part of both initiatives. In our view these initiatives and conversations present an opportunity to review those information requirements to ensure that while consumers receive timely information in an effective manner, they are not suffering from information overload and that suppliers are not being burdened with unnecessary or duplicating regulation. A rationalisation in this area will benefit all parties by allowing information delivery to focus on delivering material of importance in a useful way.

ENDS

Last updated: 18 November 2014

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