Ofcom in the UK is asking for consumer feeback on mobile regulation

 In regulation

Ofcom(the UK telecoms, TV, radio and spectrum regulator) has published an initial consultation document assessing how the mobile sector delivers on the needs of UK citizens and consumers and posing questions about the future of competition and regulatory policy.

Ofcom’s aims for the sector are to ensure that:

  • consumers get the best choice and value for money whilst being protected from inappropriate practices like mis-selling;
  • the industry continues to thrive and innovate, to the benefit of consumers, driven by vibrant competition; and
  • regulation evolves to reflect the changing needs of citizens, consumers and the industry. 

The consultation is part of Ofcom’s work to ensure that regulation reflects the reality of the converging market and considers how regulation should evolve as choice of mobile and fixed services expands.

The number of mobile phone subscriptions in the UK stands at over 70 million, exceeding the population of 60 million with households now more likely to have a mobile service than a fixed service. Some 85% of the adult population in the UK now have a mobile and it has become the device that we would not leave home without.

Many of today’s mobile devices are used to access the internet, take pictures, create and watch films and find locations. For many, they are replacing fixed-line phones, cameras, video recorders and maps. Increasingly popular mobile broadband services offer the convenience of broadband on the move.

The UK has the most competitive mobile industry in Europe – with five operators and a healthy number of virtual network operators competing to offer services. The sector generates over £15bn a year – 51% of overall retail revenue for telecoms in the UK. The mobile sector now produces more revenue than fixed voice and broadband services combined.

Consumer interest: over 90% of us are happy with our mobile service – but too many are not. Ofcom is concerned that complaints by consumers about mobile services appear to be rising. We are looking at how to ensure that rules to protect consumers are clear, effective and relevant, given the rapid changes in technology;

Mobile as part of the broader communications market: the consultation considers how growth in mobile use is changing the wider communications sector and the implications for regulation. Ofcom wants to ensure that regulation supports innovation and will deregulate where competition works to protect consumers and citizens;

Approach to regulation: in 2007, Ofcom set mobile termination rates, the charges that operators make to connect calls to each others’ networks, to come down year on year. Ofcom’s consultation asks whether this approach to regulation is appropriate for the future or whether there are more attractive alternatives; and

Broadening mobile access: the consultation also asks what approaches could be taken to extend the coverage of mobile networks, both to address so called “not spots” in 2G and to build coverage in 3G.

Ofcom’s Chief Executive, Ed Richards said: “Mobile communication is now a central feature of modern life. As our flourishing mobile sector evolves, we want to help maintain strong competition and innovation alongside consumer protection.  With significant market and technology developments underway, now is the right time to ask some tough questions about the future approach to regulation. We look forward to a wide ranging debate on these issues.”

The consultation which closes on 6 November can be found at: http://www.ofcom.org.uk/consult/condocs/msa08/

The BBC has also reported on the consultation.

London Calling comment: The review is something welcomed by consumers (but probably not by mobile operators). There has also been some commentary that the review could recommend to allow operators to charge for receiving mobile calls as happens in the US.  Back in Australia when the AMPS network was first launched by Telstra, low value plans ($10 per month) had this structure, but all other plans were caller (A party) pays.

My view of the US mobile market has always been that the slow growth has been largely due to the receiver pays model for mobile.  Back in 1999 when I was visiting my friends in Atlanta that worked for Bellsouth, they told me they rarely gave out their “cell” number, because if you were called – you paid to receive the call.

I can understand those such as BT who do not run a mobile network, hence pay the balance of the mobile termination fees would support such a move.  My view is that receiver pays would only work with a small market segment.  Perhaps mobile advertising could be used to offset the cost of a receiver pays model!

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