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Nearly half of consumers put off by switching communications provider

September 10, 2010

New proposals for smoother broadband and landline switching

Ofcom today published research which shows that nearly half (45%) of consumers with broadband or a landline think that switching communications provider is too much hassle.

Ofcom is considering ways to make the switching processes quicker and easier across communications services, initially focusing on broadband and landlines, to improve consumers’ experience and to make competition more effective.

Ofcom committed to review switching processes in its latest Annual Plan. In addition, a number of broadband and landline providers, as well as consumer groups, have expressed the view that Ofcom should consider these issues.

Switching to benefit consumers

Today, Ofcom proposed that in principle a process in which the customer’s new service provider (the gaining provider) takes the lead on switching the service is most likely to deliver the best outcome for consumers. This would need to include appropriate measures to protect consumers from so-called “slamming”, where a customer is switched without their consent.

The new provider has an incentive to ensure that the switching process is as smooth as possible. This is also more likely to deliver lower prices, more choice and innovation for consumers because it facilitates communications providers competing vigorously for rivals’ customers.

With the roll out of super-fast broadband across the UK, Ofcom is considering ways for the new provider led process to be applied to this next generation of communications services.

And with half (50%) of consumers now taking more than one communications product in a bundle, switching activity is likely to become more complex. Therefore, Ofcom is also considering the switching process between bundles of broadband and landline services.

Current switching processes

Over time, various switching processes have been developed for different communications services.

According to Ofcom’s research, of those consumers who have switched broadband provider using the Migration Authorisation Code (MAC) process, over a third (39%) think that changing provider seems like too much hassle*.

The research also shows that, of the consumers who have switched landline or broadband provider, using the Notification of Transfer process, nearly a quarter (22%) of people think that changing provider seems like too much hassle**.
Ofcom intends to publish a second consultation to further develop the proposals in spring 2011.
Ofcom’s research on switching can be found here.
ENDS

*Currently, many broadband services are switched using the MAC process. This is an example of a losing provider led process where the consumer contacts their current provider to obtain a MAC. The consumer must then contact their new provider to give them their MAC within 30 days.

**Currently, most landlines and some bundles of landline and broadband are switched using a Notification of Transfer process. This is a gaining provider led process where the consumer contacts their new provider. The consumer will typically receive letters from both their old provider and their new provider about the switch. The consumer then has 10 days to stop the process if they change their mind.

NOTES FOR EDITORS

1. Advice for consumers on switching broadband provider can be found at: http://consumers.ofcom.org.uk/2010/08/switching-broadband-provider/.

2. Under section 3 (1) of the Communications Act 2003, Ofcom has a duty to further the interests of consumers in relevant markets where appropriate by promoting competition.

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