The Analysis Editor’s Letter


‘Telecoms firms must act’


Stephen Kiely Editor, CCRMagazine stephen@ccrmagazine.co.uk


New Ofcom research has called for telecoms collectors to take more action to support customers in difficulty, after highlighting the challenges and tough choices many telecoms customers are facing this year. The regulator found that reliance on


telephone and broadband services had increased significantly in recent years, and this trend accelerated in 2020 as many of us continue to spend more time at home. So continued investment in upgrading the UK’s networks is vital. Generally, broadband and mobile


customers are getting better services for less money. Average internet speeds and data usage have risen significantly, while average household spend on telecoms has been going down in recent years. However, the coronavirus pandemic has


significantly affected many people’s finances. So, it concluded that it “has never been more important to ensure that people who are struggling to pay get the support they need, and have affordable options available to them”. In March, the UK’s major broadband


and mobile companies agreed a set of commitments with government and Ofcom to support and protect vulnerable customers. Ofcom said in a statement that it continued to support the efforts companies are making to help make sure people stay connected at this difficult time. Ofcom’s research found that nearly one in five households (19%)


– around 4.7 million homes – struggle to afford their telecoms services, our research found. In total, 6% have difficulties paying for their fixed home broadband, while 5% struggle with their mobile bill. When struggling to pay for a service, the most common action


taken by customers is to cut back on a package to make it more affordable – something 11% of households say they have done. Other steps include reducing spend on other items such as food and clothes (5%), cancelling a service (4%), missing a payment (2%) or changing payment method (2%). Data from providers indicates that the proportion of customers in


arrears was relatively stable between January and September (2% for broadband and 3% for mobile). While the proportion of customers disconnected for non-payment fell during the initial lockdown


January 2021


customers in financial difficulty, we will consider further action. This could include working with the government to determine whether an industry-wide regulated social tariff is necessary


Should providers not address our concerns through their current levels of support


to


period, there was an increase between June and September, to higher levels than before the pandemic. It said that some broadband providers –


such as BT, KCOM and Virgin Media – offer cheaper tariffs to help customers on low incomes, but relatively few customers have taken up one of these targeted affordable options. Although the regulator welcomed the


swift action taken by providers in response to the pandemic, it said that it wanted firms that do not already offer a targeted affordable tariff for customers on low incomes to consider doing so. Providers that do offer such packages should do more to promote them, to try and raise awareness among customers who are likely to be eligible. Ofcom also recently called on providers


to revisit their debt and disconnection practices, to ensure sufficient support is offered to customers who may be struggling to pay their bills. Networks and communications group


director, Lindsey Fussell, said: “Lockdown has laid bare our dependence on a reliable internet connection. So it is important that affordable options are available so everyone can stay connected – particularly those who have fallen on hard times. And while we welcome the support firms have provided customers this year, some people continue to face challenges and it is clear providers can


do more to support customers who are in financial difficulty.” Given the issues raised by the research, and the challenging


economic outlook, Ofcom said that it would carry out further research – and publish another report – on affordability and debt next year. It warned that: “Should providers not address our concerns through their current levels of support to customers in financial difficulty, we will consider further action. This could include working with the government to determine whether an industry-wide regulated social tariff is necessary.” The telecoms sector will clearly not be alone in coming under


pressure from government and regulators to be continue to be at the top of its game in assisting struggling customers, so this must clearly be an area that we all keep in focus as the year continues. Happy New Year and enjoy the magazine!


www.CCRMagazine.com 3


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