Ofcom gives UK consumers the opportunity to dump their operator – by text
It may not be the classy thing to do but ending a relationship by text message is what UK regulator Ofcom has mandated customers will be able to do with their mobile operators by 1 July 2019, writes George Malim.
Ofcom says that around two in five mobile switchers (38%) – 2.5 million people – say they experienced at least one major problem when switching, while seven in ten encountered at least some difficulty and this appears to be the regulator’s motivation for enabling UK subscribers to switch via text.
However, Ofcom has recognised that bringing in these reforms means mobile operators will need to make changes to their systems and the new process will require coordination between mobile companies. The regulator envisages that the industry will need to set up the new short codes for people to text, and the technology to send instant automated responses to switching requests, as well as new billing arrangements to end notice-period double payments.
For those reasons there will be an 18-month implementation period before the new rule comes into effect, providers must comply by no later than 1 July 2019.
Lindsey Fussell, Ofcom’s Consumer Group director, said: “Too many people are put off by the hassle of switching mobile provider. Our changes will make it quicker and easier for mobile phone users to get a better deal. Customers will control how much contact they have with their current mobile provider, preventing companies from delaying and frustrating the switching process.”
Industry insiders welcomed the move for consumers but feared operators could find achieving compliance a challenge. “As phone contracts become increasingly hard to escape, being able to switch mobile network with a text message will be a welcome godsend for consumers,” said Tim Dimond-Brown, the vice president of operations at Quadient. “From a provider’s point of view, at first glance this may seem overwhelming. However, providers can successfully deal with new rules such as this by ensuring they communicate using the three p’s: process, proactivity and proof.”
“Specifically, this means placing a firm focus on internal processes; acting proactively when reaching out to customers; and being able to prove compliance,” he added. “All three will make it far easier for the industry to ride out the storm. Failing to follow this process means telecoms providers will run the risk of facing Ofcom’s wrath, while damaging valuable customer relationships at a time when it’s easier than ever before to take their business elsewhere.”
Others are less convinced that the move is necessary, citing the relative simplicity of current switching processes. “Although the current process wasn’t hugely onerous it should still be welcomed,” said James Gray, a director at Graystone Strategy. “This is another significant change by Ofcom to make it easier for customers to move their numbers. Many consumers are far more likely to go online than interact by text, but anything that gives people a choice and helps customers move freely will benefit the industry.”
However, some see it as an opportunity for operators to refine their customer retention strategies and compete more effectively. “Today’s announcement signals a step change in the mobile switching process, with consumers set to benefit from a more frictionless experience when changing operators,” said Adrian Baschnonga, the global lead telecommunications analyst at EY. “Ultimately, these reforms pave the way for more confident interactions between customers and their service providers.”
For Gray, it’s an opportunity for operators to review their policies and how they manage retention and saves of customers in the future. “There has always been an underlying trend to drive loyalty rather than retention and to proactively manage customers rather than trying to change their mind once they have decided to leave,” he explained. “This decision from Ofcom should encourage operators to do more to improve overall customer experience, for instance improve the experience of using the network and services throughout their contract not just at renewal, which is good news for consumers.”
The 18-month timeframe provides some respite for operators to make their preparations. “The real winners to emerge from this development will be the ones who realise it is a wake-up call,” added Dimond-Brown. “Every stakeholder within the telecoms industry must be confident they are laying the groundwork and providing excellent customer service at all times, and communicating through an ever-evolving range of channels. The fact of the matter is that doing this will not only allow them to avoid the attentions of the regulators, but will also make it less likely that customers will want to switch in the first place.”