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Summary

The UK telecoms regulator, Ofcom, is planning to overhaul the mobile switching process, having completed a review in July 2015 into the challenges that customers face when changing providers. The regulator launched a consultation on how to make the process simpler for customers and has provided two alternative options – one that simplifies the existing number porting process and one that would go further by introducing a gaining provider-led switching approach. The consultation closes on June 1, 2016 and a final decision is expected toward the end of 2016.

New switching measures will address double paying and temporary loss of service

According to Ofcom's review of the mobile switching process, 2.5 million people (38%) who changed mobile provider in the last 18 months said they experienced at least one major problem during the process. Problems included temporary loss of service and difficulties with cancelling their service, contacting their existing provider, and keeping their phone number. The new proposals from Ofcom aim to reform the mobile switching process, address any loss of service, and improve the management of notice periods to avoid double paying.

Unlike the majority of European countries, until recently mobile number portability in the UK has been donor-led, but Ofcom's preferred approach, which it outlined in its proposal, would see a move to a gaining provider- or recipient-led switching process. This would place the responsibility for changing provider and transferring a customer's mobile number in the hands of the new operator. The new provider would have to obtain information about the existing contract, and then ensure any outstanding charges, credit, and the notice period details are sent by SMS to the customer. The recipient-led approach has already proven successful for customers switching broadband and landline providers, having introduced the new "one touch" process for fixed services in June 2015. The process removed the need to cancel contracts with existing suppliers.

The consultation has also proposed an alternative to the gaining provider-led approach, which would simplify the existing donor-led process by focusing on streamlining number porting. Customers would no longer need to speak to their existing provider to request their porting authorization code (PAC) to transfer their mobile number. Instead, an automated PAC request would be initiated and the customer would receive the PAC by SMS or online, along with any additional information about charges and notice periods. Whichever option is chosen, the final measure is expected to create a faster and simpler switching process for customers.

Ofcom also intends to introduce measures to improve the management of notice periods to avoid the overlapping of old and new mobile contracts, which results in customers paying double. Under a recipient-led process, new providers would be required to inform customers about their notice period and offer them the option to defer their switch by up to 30 days. However, if Ofcom decides to maintain the donor-led process, providers would be required to start the notice period from the date the PAC is requested, rather than when the PAC is used. This allows customers to choose to delay the switch until the end of their notice period. The new measures also prevent the old provider from deactivating the SIM card before the new service has been activated, removing the possibility that customers are left without service.

The proposals comprehensively address consumer harm and should improve competition, quality, and innovation in the market. Certainly, this will encourage consumers to shop around and will help the 37% of people highlighted in Ofcom's analysis who have actively considered switching but had many concerns about the process. The recipient-led approach in particular has the advantage of removing the requirement to contact the incumbent provider and engage in any retention discussions, which many would welcome.

Additionally, Ofcom is considering whether a recipient-led process is appropriate for bundled services (landline, broadband, and pay-TV). It is in the process of completing a review of customers' experiences, and plans to publish a proposal in the next six months.

Appendix

Further reading

UK (Country Regulation Overview), TE0007-000949 (October 2015)

Regulatory Scorecard 2016: EU5, TE0007-000971 (January 2016)

Author

Sarah McBride, Analyst, Regulation

sarah.mcbride@ovum.com

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