Half of mobile users switching telcos face issues - Commerce Commission

The Commerce Commission is calling on telcos to improve the industry switching process. Photo / 123RF

A new Commerce Commission study has found the switching process between telecommunications providers is not working as well as it should for consumers.

The commission is calling on telcos to improve the industry switching process, raising concerns over the low levels of switching between providers.

The study found 50% of mobile switchers and 45% of broadband switchers ran into at least one issue when switching.

The experience was so bad that 29% of mobile switchers and 27% of broadband switchers said they wouldn’t want to switch again in future.

The commission conducted its study in response to concerns that switching levels in New Zealand are comparatively low and that consumers are being deterred from moving to competing providers – even in the face of more compelling offers.

The commission’s latest consumer satisfaction report found that 31% of mobile consumers and 29% of broadband consumers have not switched because it requires ‘too much effort to change providers’.

“Most consumers switch to get better price, quality or value – so any actual or perceived barriers that prevent switching also prevent important signals being sent to the market in these areas, dampening competition,” said telecommunications commissioner Tristan Gilbertson.

The commission’s market monitoring shows that 61% of mobile and 43% of broadband consumers have been with the same provider for more than five years.

Gilbertson said a lack of comprehensive protocols between the “gaining” service provider and the “losing” service provider was a central issue with the current switching process.

This led to a number of problems, including double billing, unexpected charges, and delays.

“We see an important opportunity for the industry to work towards addressing these issues and we welcome the indications received from the NZ Telecommunications Forum [TCF], that they’re keen to work with us to explore this further,” Gilbertson said.

“It will take some time to improve the process, but we still encourage consumers to shop around for the best deal for them and, if they want to switch, work with their new provider to help ensure the process runs as smoothly as possible.”

Gilbertson said having a healthy, competitive market means ensuring consumers face no or very low barriers to change between competing products and providers.

TCF chief executive Paul Brislen said the sector is one of the easiest for customers to move around in.

“We believe changing telecommunications providers is a relatively straightforward process and the Commerce Commission’s own data shows that as well.

“The Commission’s report shows only 4% of mobile customers and 5% of broadband customers were dissatisfied with their switching experience.

“However, we are always willing to consider streamlining our processes where needed and we welcome the opportunity to have a closer look at any barriers the Issues Paper has identified for consumers.”