Mobile Telecommunications Market: Contracts

Nusrat Ghani Excerpts

Tuesday 24th November 2015 Commons Chamber

[Nusrat Ghani (Wealden) (Con)]

Does my hon. Friend agree that transparency is particularly important for the elderly? People are often encouraged to get a mobile phone by their children or grandchildren in case of an emergency, but they are not always technologically savvy enough to know what kind of tariff or package is right for them. They are at high risk of being hugely over-charged when their contract comes to an end, particularly as they get older.

[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.

--- Later in debate ---

[Nigel Huddleston]

I completely agree. I am focusing on the contract side of things today, but it is absolutely the case that when consumers consider moving operators they look at maps of coverage and whether they can get a 3G or 4G service. That is one of the points to consider. Often they are then persuaded that an alternative operator will fulfil their needs, only to find out when they open the phone at home that that is not the case. There are no repercussions to that and no compensation. That is a major concern that needs to be addressed.

[Nusrat Ghani]

My hon. Friend makes an important point about the design of mobile phone plans. Does he support encouraging mobile operators to have flexible plans that allow people to pay for a combination of data, calls and texts that reflects their needs, instead of their having to pay more for a plan with unnecessary extra minutes, just because they want more data?

[Nigel Huddleston]

My hon. Friend makes an excellent point that touches on the whole purpose of this discussion. Many people are either on plans with services they never use, in which case more flexibility would be appreciated, or paying a penal rate for services they did not anticipate using but ended up using. That is costing consumers hundreds of millions of pounds a year—I think that £885 million a year is spent on out-of-tariff charges, for example.