Retail telecommunications a priority for 2017/18

At our recent Competition Matters conference we outlined our priorities for the upcoming year, including our focus on retail telecommunications across both our consumer and regulation work.

The telecommunications sector has the potential to have a significant impact on consumers, with almost every New Zealander using a mobile or fixed-line phone and broadband.

Over the past few years we have done a lot of Fair Trading Act compliance work with the sector and taken a number of cases, including against Trustpower for misleading consumers over the price and terms of a bundle offer, and Vodafone for false representations on invoices.

Despite this, we continue to receive a high level of complaints about representations made by retailers. As a result, in 2017/18 we are prioritising identifying misleading representations in the sector and taking appropriate enforcement responses, to drive a change in behaviour.

So far we have engaged with the industry on representations made around speed (‘gigabit’ advertising) and recently issued warning letters to four telcos indicating their behaviour was likely in breach of the Fair Trading Act. We continue to investigate a number of other matters including incorrect billing, failure to identify the subscription nature of mobile add-ons, incorrect calculation of broadband usage, unfair contract terms, and representations concerning the nature and availability of internet services.

In the regulation space, our work under the Telecommunications Act has been focused on wholesale access to promote retail competition. This has delivered improvements in retail price and value for consumers in terms of data and bundles, with consumers now getting better value for mobile and broadband services. Despite this work, we continue to be concerned about service quality.

Our work over the coming year will focus on the life cycle of the consumer experience – seeking information and making a purchasing decision about a product, using and paying for the product, engaging with the provider, and dispute resolution.

Our initial focus will be to provide consumers with information to help them make informed purchasing decisions, as well as directing them where to go when they have an issue.

The Commission is also preparing for the passage of the Telecommunications (New Regulatory Framework) Amendment Bill, currently before Parliament. The bill proposes a more predictable utility regulation model for Ultra-Fast Broadband (UFB) fibre, deregulates copper lines where fibre is available, and includes measures to improve the quality of service for consumers by increasing regulatory oversight. The proposed legislation will require the Commission to report on retail service quality in a more accessible way and review the Telecommunications Dispute Resolution Service regularly to ensure it is working effectively. The legislation would also give us the power to make codes that address retail service quality, if industry-led codes are inadequate.