Picking the right phone or broadband plan: Commissioner wants five measures to make it easier

Measures such as displaying the total cost and average monthly cost of a one- or two-year plan - which might have freebies stacked up front - will make it easier to shop around for a mobile or broadband plan, Telecommunications Commissioner Tristan Gilbertson says.

A market watchdog has asked telcos to introduce five measures he says will make it easier to work out the total cost of a mobile or broadband plan - which might have goodies or free months stacked towards the start of long terms, or costs hidden in fine print.

Telecommunications Commissioner Tristan Gilbertson wants providers to prominently display the average monthly cost of a plan, the total cost, and any break fees. He says he also wants “more consistent” coverage maps. And he wants plan summaries that make it easier to directly compare different options.

Like the watchdog’s other recent attempts to lean on the telcos - which have been largely ignored - these are a voluntary set of guidelines, still in draft.

His preference was to give it a few months to constructively work with telcos - but he also told the Herald that if that ultimately doesn’t work, he could take the so-called “big stick” option of introducing a mandatory code of conduct.

Gilbertson said he realised the requested changes could be “confronting” but that telcos had ultimately come onboard with other measures, such as quoting performance speeds from the commission’s Measuring Broadband New Zealand testing.

“Consumers find it difficult to navigate different combinations of billing terms, discounts, and promotions. We want providers to cut through the complexity by disclosing upfront how much consumers will pay each month for a particular deal,” Gilbertson said.

Poacher turned gamekeeper: Telecommunications Commissioner Tristan Gilbertson held in-house counsel roles with Telecom and Vodafone earlier in his career.

“Mobile coverage maps are inconsistent between providers and difficult for consumers to compare.

“Coverage differences matter - especially for rural consumers or people travelling or commuting. Knowing what real-world coverage they can expect from different providers and technologies is important - especially with 5G roll-out and competition heating up.”

It’s part of a rolling wave of initiatives by Gilbertson that he says will make it easier for people to shop around - although so far the telcos have so far preferred to follow their own steps.

"Consumers find it difficult to compare what they are getting," says consumer advocate Craig Young.

“We definitely welcome these draft proposed guidelines and are keen to see them implemented,” Technology Users Association (Tuanz) head Craig Young said.

“We know from our research back in 2021 that consumers find it difficult to compare what they are getting and what they are paying across providers so making it more consistent will be incredibly helpful. It should help remove some of the barriers to switching but there is more to be done.”

Those other nudges

In September, the first Commerce Commission “customer service league table” was released, ranking the phone companies, plus power companies who bundle mobile or broadband.

Gilbertson asked Spark, One NZ, 2degrees to display the league table prominently on their home pages, and in their stores. None of them have - although One NZ has begun publishing daily stats on its contact page, including average waiting times.

The same month, the commissioner called power-and-broadband plans “bundles of confusion”. He said that electricity and gas could be more expensive when part of a plan that also included broadband or mobile. He proposed that the standalone cost of power be displayed beside bundled plans, so customers could gauge if they were good value for money.

Two of the top-tier of power retailers - Contact and Mercury - offer plans that bundle power with broadband or mobile phone service.

This morning, it was not immediately apparent that either power company was following Gilbertson’s voluntary guidelines.

Earlier, as the voluntary guidelines were introduced, Contact chief retail officer Matt Bolton said: “Contact offers a broadband and energy bundle to provide convenience for customers who want to manage their outgoings in one bill. We aim to ensure that our bundle pricing is competitive to give our customers value for money.”

“We will work actively with the Commerce Commission to ensure customers of bundled telco products continue to get the information they need to make the best decisions for them.”

A spokeswoman for Mercury said: “We welcome the guidelines provided by the commission and are confident that we already comply with them.”

One NZ responds

“One NZ supports the outcomes the commission is seeking to achieve around increased transparency to consumers,” One NZ corporate affairs head Conor Roberts said. 2degrees and Spark took a similar line.

One NZ has begun posting daily call centre stats.

“However, it’s important that the commission works collaboratively with industry on achieving these outcomes to ensure that solutions are practical and deliver genuine benefits to consumers,” Roberts said.

“We already do a lot in the transparency space, including easy-to-compare broadband offer summaries, annual comms to mobile customers about their usage and spend to help ensure customers are on the right plan for their needs, and publishing daily customer service metrics on our website.”

2degrees responds

2degrees liked Gilbertson’s focus on monthly average pricing, which it framed as being in sync with one of its ad campaigns.

“Charging every 28 days is poor practice. Ultimately that means some people are paying their telco 13 times a year, and probably think they are only paying 12 times,” a spokesman for the telco said.

“The Commerce Commission is right to call this out.”

Spark responds

A Spark spokeswoman said: “We have made a range of improvements to support customers when choosing a plan that suits their needs, including most recently our award-winning Made for You Review programme which uses AI to proactively contact pay monthly mobile and broadband customers to recommend the best plan available based on their needs. As an example, this year customers on wireless broadband plans who acted on their recommended plan change saved approximately $15 per month on average.”

Contact and Mercury have been asked for further comment.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.