Mobile Telecommunications Market: Contracts

Jim Shannon Excerpts

Tuesday 24th November 2015 Commons Chamber

[Nigel Huddleston]

My hon. Friend makes an important point. Research by Which?, and others, has shown that as we go through the age brackets, the number of people switching goes down. Many more people in the elderly age groups are on the wrong contract, and many more do not really know what the process of switching involves. I know that Age UK campaigns on that issue.

What can be done about this issue? The good news is that some progress has already been made. In July, Ofcom launched a consultation on consumer switching, seeking views on a range of mobile switching options. I await the results with interest. The Government have a strong record on consumer affairs, and the Department for Business, Innovation and Skills recently set out six specific proposals, or principles, on switching intended to cover a range of industries including not only the mobile sector but broadband, banking and energy. In these, the Government recognised that consumers should be able to switch quickly, at an agreed date, for free, with access to data in a format that can be easily understood and that the switching process should be gainer-led, eliminating the need to contact both losing and gaining operators. I believe we are unique in Europe in still having a loser-led system for switching.

Things are moving in the right direction. I am aware that some operators themselves are keen on the gainer-led system, including Three. In many ways, I feel I am pushing at an open door on switching. I am confident about progress on switching, but further work is needed on contract transparency and tariffs.

[Jim Shannon (Strangford) (DUP)]

I liked the hon. Gentleman’s introduction. I remember my first mobile phone: it was the size of a red brick and I used to carry it everywhere. It filled my hand and two pockets. Mobile phones are a part of life, more so today than ever. Does the hon. Gentleman agree that one of the advantages consumers have is that competition in the market has pushed the price down? Companies want to hold on to their customers as if with glue and they will not let them go. Companies are very reluctant to let go of businesses in particular, because they see their commercial value. Does he think more needs to be done for companies involved in industry and commerce?

[Nigel Huddleston]

Indeed. The hon. Gentleman makes a very important point. The debate is focused on the consumer, but the same principles absolutely apply to business: the same discussions and concerns about the customer service of some operators apply equally to business.

When I received my electricity bill the other day, I was very pleased to see a note at the bottom of the bill that said:

“Good news—you’re already on our cheapest overall tariff. We’ll let you know once a year if this changes.”

Would it not be great if there was something similar in the mobile space? Instead, we are paying £5.4 billion more than we have to. Even if that figure is exaggerated and even if it is not correct or just a fraction of that, we are still talking about a significant sum. There are three key reasons why we are significantly overpaying for our mobile services. First, some consumers are paying for services they never use, with 58% generally going under their minutes allocated and 63% under on their text limit.