Browsing for a new mobile phone or broadband plan? With the introduction of new guidelines from the Australian Communications and Media Authority, you may find it easier to understand and compare plans and providers - at least in theory.
As part of the ACMA's revised Telecommunications Protections Code (TCP), all telecommunications providers are now required to include a two-page ‘Critical Information Summary’ to customers that clearly outlines the charges and inclusions of each plan.
The Critical Information Summary must be provided at point of purchase, at the request of the customer and also be accessible on a provider's website. Any telco that fails to comply with the new requirement could face up $250,000 in fines from the ACMA.
For mobile phone users, the Critical Information Summary will cover:
- Information about the service – including what is included and excluded, and the minimum term of the service.
- Information about pricing – including the minimum monthly charge, the maximum early termination fee, the cost of a standard 2 minute national mobile call (including flag fall), a standard national SMS and using one megabyte of data. This section must also list how many standard 2 minute national mobile calls a customer could make with their included value, if they restricted their allowance to calls only.
- How customers can get call and data usage information.
- How customers can set up usage alerts.
- Information about global roaming rates.
- Customer service contact details.
- Information on the Telecommunications Industry Ombudsman and how customers can make a complaint.
These summaries have been introduced to, hopefully, empower customers to compare plans and feel confident shopping around for the best deal for them. In particular, the ACMA has emphasised that the changes to pricing information will make it easier for customers to understand the 'real value' of a provider's plan.
The introduction of Critical Information Summaries follows on from changes to advertising launched late last year, which forced telcos to eliminate misleading terms such as 'free' from promotional material. It's a great thing for Australian consumers that the industry is becoming more and more regulated; in comparison, the US market is much more liberal with its advertising, offering free phones despite the devices actually being attached to a two-year contract.
While it’s been speculated that the new pricing details summaries could be the equivalent of unit pricing information as used in supermarkets, we’re not sure it’ll be quite so simple for customers. The value advertised by companies, and listed in plan details, is what you get in telco credit rather than real dollars – what some critics are labelling ‘funny money’. We’re not entirely convinced that this way of structuring pricing is helping customers to truly understand the value of their plan allowance. A scroll through online feedback shows a lot of consumers are just as dissatisfied and confused now as they were before the new regulations came into effect.
Comparing the values of complex products such as mobile phone plans just isn't as simple as comparing the prices between, for example, boxes of cereal. The providers themselves have criticised the new rules - Optus has publicly stated that the ACMA’s introduction of unit pricing will only be suitable for simple, basic telecommunications products. So it's especially misleading for companies to base their advertising and pricing around claims such as ‘$50 = $500 Value’, when $50 doesn’t literally equal $500. Rather, it equals what your telco claims to be $500 worth of features such as texts or calls, and the cost of these vary from provider to provider.
Supposedly, the ACMA was optimistic that requiring the disclosure of unit pricing would push telcos to eventually change the way their plans are structured and develop simpler pricing regimes. But for now, perhaps a better system would be just stop listing a plan's included value in dollar amounts – it’s a virtually meaningless way of advertising a product, and only adds to the confusion customers are experiencing. Keeping advertising limited to how many minutes a customer is paying for each month, rather than how much 'included value', might make it easier for the average consumer to get their head around what it is they're paying for.
There's also the question of how the new rules apply to included data. On most plans, data doesn't come out of the included value - you may get a certain amount of MB or GB as a separate allowance, which isn't assigned a monetary value. ACMA's proposed solution, according to examples on their website, was list the amount per MB as 'zero' until the free allowance had been exceeded, with the additional price per MB of any usage that exceed the monthly limit. But consumer advocates have raised concerns that it would be deceptive to list a service as 'free' when consumers are, in fact, paying for it each month. As it is, right now providers appear to be including just the cost per megabyte for data amounts exceeding the monthly allowance. The unit pricing doesn't apply to 'unlimited' broadband only plans, even when the service is shaped (meaning broadband speeds slow down significantly) once a certain amount of data is used each month, which means customers will need to do their own maths when determining which broadband provider offers the best deal.
Aside from pricing, most of what's included in the Critical Information Summary is info that the telcos have been making available to customers anyway, albeit perhaps not so succinctly or prominently. Condensing this into a two-page document is a good idea, but it’s doubtful the move will bring down the ‘confusopoly’ of telecommunications providers.
Although the TCP code is taking steps to address common sources of consumer complaints, it still seems unlikely to stop many customers feeling misled and misinformed about their mobile phone and broadband contracts.
Related Articles
