Improving quality and value in the communications sector
28 January 2014
Ofcom has today outlined its programme of work to ensure that consumers receive value for money and a good quality of service from their communications providers.
While customer satisfaction with communications services is generally high, Ofcom is focused on further improving consumers’ experience across the sectors it regulates. This work is informed by findings in its annual Consumer Experience Report, published today.
Alongside this, Ofcom has carried out analysis of price and quality trends over time, and is publishing this in the Cost and Value Report.
This reveals that, over the past 10 years, consumers have benefitted from significant reductions in prices across most communications services and that the UK compares favourably against international comparators.
At the same time, consumers say that landline phone, broadband, mobile, and pay TV compare favourably on value for money relative to other services. They are spending less but receiving more.
Ensuring high quality services and value for money
Ofcom's work is focused on further improving the value and quality of communications services and helping consumers to make informed purchasing decisions. This includes:
- Ensuring landline and broadband customers get installations and faults repaired quickly by Openreach, which manages access to the UK's copper telephone network. Ofcom is consulting on performance targets that Openreach would have to meet or face possible fines.
- Implementing new measures to help customers switch their landline and broadband provider more easily, while protecting them from having their lines switched accidentally or without their consent. In the coming months Ofcom will be looking at how to improve switching for other services.
- A review to assess whether key communications services are affordable, particularly for the least well off consumers. Ofcom wants to ensure that the cost of certain communications services is a not a barrier to people having access to them. The review will look at which telecoms services consumers think are essential to their communications needs.
- Publishing quality of service information to help consumers compare the performance of mobile networks and to incentivise providers to improve. Ofcom will be carrying out research into the quality of mobile reception and coverage. Ofcom will also publish new data revealing 3G and 4G mobile broadband performance and will ensure near-universal coverage of 4G mobile, up to 98% outdoors by 2017 at the latest.
- Protecting consumers from harm. Ofcom is ensuring consumers are better protected against unexpected mid-contract price rises. And working with industry, Government and other regulators, Ofcom is also focused on tackling nuisance calls and bill shock.
- Monitoring Royal Mail's performance following its failure to achieve delivery targets in 2012-13. Should Royal Mail fail to improve its delivery performance, Ofcom can open an investigation, which could result in enforcement action, including the possibility of fines.
- Publish information on thebest and worst performing providersand ensure consumers have complaints dealt with effectively. Consumers can seek redress if they have a problem with their provider through Ofcom's approved Alternative Dispute Resolution Schemes. Ofcom is working to increase consumer awareness of ADR and has opened a monitoring and enforcement programme to ensure providers' complaints handling processes are working well for consumers. Ofcom will also continue to publish complaints data to help consumers compare providers' performance.
- Providing information and advice to help protect consumers and enable them to make informed choices about services, products and providers. Ofcom has recently published a number of new consumer guides on topics including: managing the costs of communications services; services that can help protect against nuisance calls; how to prevent bill shock; and
using a mobile phone (in ‘Easy-Read format).
Speaking at the launch of Consumer Experience Report event today, Ed Richards, Chief Executive of Ofcom, said: "The quality and value of communications services matters as much as their availability. The record in the last decade is good but we are determined to maintain focus on these important areas to ensure that communications markets continue to work in the best interests of consumers".
Prices have fallen over the last 10 years
Ofcom has today published a report on the Cost and Value of Communications Services in the UK over the last 10 years.
Strong competition has helped drive down real-terms prices across the sectors Ofcom regulates, with the exception of postal and some pay TV services.
At the same time, investment and innovation has delivered new networks and services, and increased quality and choice to consumers. Not only are consumers spending less on their communications services, they are generally getting more for their money.
The main findings from the report are:
- The average monthly average spend by individuals on mobile services declined by 23% in real terms between 2003 and 2012 (from £24.99 to £19.13), while the market has seen dramatic changes in the capability and use of mobile phones.
- Over the same period, the volume of voice calls has more than doubled from 54 billion minutes per year to 125 billion, SMS volumes have increased from 24 billion to 172 billion, while 92% of adults now use a mobile phone. In addition, consumers' use of mobile data doubled between 2011 and 2012 alone.
- The average amount spent on a residential fixed broadband connection has decreased by 48% over eight years (from £31.79 in 2004 to £16.38 per month in 2012).
- This decline has occurred against a backdrop of increased broadband take-up (6% in 2003 compared to 72% in 2013) and wider availability and take-up of higher speed broadband packages.
- Since November 2008, the average UK residential fixed-line broadband speed has increased from 3.6 Mbit/s to 14.7 Mbit/s in May 2013.
- The average amount spent on landline services per month fell by 28% between 2003 and 2012 (from £29.71 to £21.47). Over the same period there has been a significant reduction in landline call volumes, from 88 billion per year in 2003 to 60 billion per year in 2012.
- However, Ofcom has identified rising prices for some stand-alone landline packages over the last year, and although most UK landline users now purchase landline services as part of a 'bundle', Ofcom is monitoring these prices to ensure that they remain affordable.
- Average spending on pay TV services among households that subscribe to them has remained consistent in real terms over the last decade at around £40 per month (£40.60 per month in 2003 compared to £40.37 in 2012).
- Some pay TV customers have, however, experienced real-term price increases for certain packages. At the same time, the choice of pay TV offerings has expanded with new high-definition, 3D TV and online TV services.
Reliability of communications services
The reliability of communications services is an important issue for consumers and a priority area for Ofcom.
Customer satisfaction with service reliability is highest for landline telephone (94%) and digital TV (93%), unchanged over the past 12 months. Satisfaction with reliability of broadband services is lower and has declined from 88% in 2012 to 83% in 2013.
For mobile phones, the proportion of consumers who are satisfied with reception and ease of accessing the network is 82% and is unchanged since 2012.
The highest levels of dissatisfaction with reliability is among consumers living in rural areas. Seventeen per cent of rural consumers are dissatisfied with the reliability of their broadband service and 19% with the reliability of their mobile service - significantly higher than the averages for these markets (11% and 12%).
After reaching a peak of 3,900 in April 2013, complaints to Ofcom about silent and abandoned calls fell to 2,857 in October 2013 - a 27% decrease.
Ofcom's consumer research also found that the proportion of consumers experiencing a nuisance call on a landline phone fell from 82% in February 2013 to 68% in July 2013. Since then, levels have remained broadly stable.
Ofcom is working closely with the Government, UK and international regulators and consumer groups to tackle the issue of nuisance calls. Ofcom will shortly publish a full update on its joint action plan with the Information Commissioner's Office.
NOTES FOR EDITORS:
- Consumer satisfaction ranges between 82% and 90% across communications sectors (Digital TV - 90%, landline telephone - 89%, mobile - 88%, and broadband - 82%); dissatisfaction ranges between 5% and 11% across communications sectors (landline telephone - 5%, Digital TV - 6%, mobile - 6%, and broadband - 11%).
- Consumers' views on value for money of communications services and those in other sectorsSource: Customers in Britain Annual Survey from Firebrand Insight - see page 19, figure 16 in Ofcom's Cost and Value of Communications Services in the UK report
Note: 'Communications Providers' is an unweighted average of home broadband providers (7.10), home telephone services (7.03), mobile network providers (7.01) satellite/cable TV providers (6.94) and postal and delivery services (6.75). The apparent increase in value for money of communications services in 2006 is partly explained by the introduction of broadband providers to the data set (who in 2006 scored relatively highly). The apparent fall in value for money of communications services from 2010 is partly explained by the introduction of Pay TV providers to the data set (who had relatively low ratings).
- Average spending per connection on pay TV, landline, mobile and fixed broadband over the last 10 years (figures in real terms)
See pages 4-15 in Ofcom’s Cost and Value of Communications Services in the UK report.
- Ofcom's Cost and Value of Communications Services in the UK report does not cover postal services, as this was analysed in detail in Ofcom's The Affordability of Universal Postal Services, published in March 2013.
- Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications, wireless communications and postal services.
- For further information about Ofcom please visit: www.ofcom.org.uk. Ofcom’s news releases can be found at: http://media.ofcom.org.uk/