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Broadband, Mobile & Energy News: Weekly Roundup 28/09/18

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Here is a run down of the top stories from the broadband, mobile, and energy industries this week:

Energy Firms Ordered to Improve Complaints Processes by Ofgem

Ofgem, the national energy regulator, has ordered 11 providers to improve their complaints handling, as they bring compliance cases against firms.

The regulator has confirmed that, of the 11 firms cited, seven have been warned, with the remaining four (First Utility, Ovo Energy, Utilita, and ScottishPower) having investigations into their practice opened.  Ofgem’s statistics note that 32% of customers were satisfied with their service in 2017, up from 2016’s figure of 27%.  However, 57% of respondents were dissatisfied with the service provided to them in response to a complaint.

Dermot Nolan, Ofgem’s chief executive, said: “Although the level of satisfaction about complain handling has increased over the past two years, it is still unacceptably low.”

Energy UK, the representative body for the country’s suppliers, argued that Ofgem was overreacting, with its own figures showing that complaints against suppliers has halved since 2014.  Lawrence Slade, Energy UK’s chief executive, said that the issue would continue to reduce itself with the disappearance of paper bills, as “given that the majority of complaints arise from billing issues, the continuing roll-out of smart meters, which ensure accurate and up-to-date bills, will help reduce this number further still.”

Three UK and O2 Get London Data Boost

Two mobile operators, Three UK and O2 have signed a deal with SSE Enterprise Telecoms to extend the capabilities of their 3G and 4G networks in the capital.  Provision has been made for a future rollout of 5G service.  SSE Enterprise Telecoms has agreed to give the providers access to its fibre-optic network in the centre of London to give them fibre optic capability, as opposed to their current mobile-only networks.  In comparison, EE, BT and Vodafone already have access to fibre-optic cables.

SSE Enterprise Telecom’s network utilises a novel approach, laying their fibre optic Ethernet/data cables through the capital’s sewers rather than purpose-built tunnels, allowing much more rapid network extension through the already-crowded underground.  Known as Fibre-in-the-Sewers (FITS), this allows the firm to “create new fibre networks in key locations at a lower cost and with faster deployment times than traditional digs.”

Dave Dyson, Three UK’s CEO, said: “Our partnership with SSE Enterprise Telecoms and O2 is one of the first examples of using existing infrastructure to improve connectivity in an urban area.”

Brendan O’Reilly, Chief Technical Officer at O2, agreed: “This partnership is a great example of SSE Enterprise Telecoms, Three UK and O2 coming together in a collaborative and innovative way to address the growing challenge and pressure of obtaining access to fibre for mobile backhaul in the UK.”

Regulator Investigates ‘Loyalty Penalty’

The Competition and Markets Authority (CMA), regulator for consumer services including savings, broadband, and similar financial or technical products, has announced that it is opening an investigation into firms punishing customers who remain with them for a number of years.

Citizens Advice, the consumer advice charity, collated customer complaints into a ‘super-complaint’ report for the CMA, the headline of which being that the total cost to customers who stick with their suppliers is £4.12 billion per year, an average of £877 per customer “ripped off.”  Citizens Advice highlighted that vulnerable customers such as the elderly, who may not be capable of switching firms as easily, are disproportionately affected by this.

Gillian Guy, chief executive of Citizens Advice, said: “It’s completely unacceptable that consumers are still being ripped off for being loyal to companies they rely on every single day.  As a result of this super-complaint, the CMA should come up with concrete measures to end this systematic scam.”

The Financial Conduct Authority (FCA) has independently announced that it is running a similar investigation into the same practice in the insurance sector, with accusations that home and car insurance becomes rapidly more expensive for customers who choose not to switch provider.

Ofcom Introduces Pricing Measures for Mobile & Handset Bundles

Ofcom, the UK’s telecoms regulator, has announced a series of measures that are intended to alleviate extremely highly priced mobile packages that rollover after the customer has fulfilled their contract, thus costing more than was advertised.

A phone on a handset/airtime bundle, spreading the cost of the physical device and usage over the period of the contract (generally either 12 or 24 months), may well continue to accrue handset fees after the contract term has ended.  Theoretically, providers should only charge for actual usage – minutes, data usage etc., with the cost of the handset being spread out evenly over the contracted months.  However, in practice, many providers actually continue to add the monthly cost of the handset after the contract has run its course – and this is what Ofcom is seeking to end.

The regulator has suggested that customers should keep tabs on their contract end date, and switch over to a SIM-only plan that will only charge for actual usage, but also states that operators are “not transparent” enough about the breakdown of costs, meaning that many would not be able to know that they are actually paying for a handset they’ve already paid off, rather than their usage.

Lindsey Fussell, Ofcom’s Consumer Group Director, said: “We are extending our work on behalf of mobile customers to ensure that handset charges are clear and fair – not just when they enter a contract, but also when their minimum period is up.”

Utility Warehouse Raises Broadband and Telephone Prices

Utility Warehouse, the UK-based ISP (internet service provider), has announced that it will hike the prices of its broadband phone package from the 1st October.  The change, quoted at 8.33%, will see monthly bills for landlines rise from £16.50 to £18, with a concurrent rise in fixed line broadband bundles.

Utility Warehouse’s change will take place on the same day that Ofcom brings in new rules protecting customers from extra fees.  One change is that the Caller Display feature, showing who is calling, can no longer be a paid add-on, but must come free.  Utility Warehouse has previously charged £2 for the service – meaning that they essentially recoup the hit from the new regulations with a general price rise.  Of course, the gradual decline of fixed handset usage in general will have a far bigger impact on profit margins, requiring higher broadband rates to compensate for the loss of landline revenue.