Price transparency

Transparent prices – our challenge

Telecommunications is a relatively new industry in which developments follow each other in quick succession. With the emergence of the mobile internet we saw an acceleration in the telecom sector. New products and services followed each other at a rapid pace. As a result, prices and subscription structures changed more frequently than had previously been the case. Between 2006 and 2010, for example, subscriptions stayed more or less the same, while nowadays they are being replaced in less than a year. This means that a considerable number of options have also arisen. For consumers such a wide and varied range can be confusing.

Facts

  • 6 million people between the ages of 12 and 75 made use of the mobile internet in the spring of 2011
  • 50% of all households had access to the internet via a smartphone in 2011
  • Data consumption increased by 100% in the first half of 2011 compared with mid-2010
  • 5.9 petabytes of data was used in the first half of 2011
  • Unexpectedly high bills are often the result of using telephones abroad, out-of-bundle costs and data consumption for radio, videos and apps

The substantial growth in data traffic also meant that unlimited internet was no longer tenable. Due to the difficult introduction that the mobile internet experienced, for many years data was offered on a one size fits all basis and too cheaply. At the same time, the possibilities relating to mobile data were increasing dramatically. The revenues from data bundles, on the other hand, were not bringing in enough to finance the investments in the network that were needed to keep pace with the growth in usage. This resulted in a search for the right commercial model. The difficulty here was that getting too far ahead of or lagging too far behind what the majority of customers wanted meant a commercial disadvantage.

Prices were adjusted, but it was difficult to explain that data was becoming more expensive rather than less expensive despite being used on a bigger scale. To reduce the risk of 'bill shock' (unexpectedly high bills), providers have taken the initiative to warn customers via a text message if they have almost used up their bundle.

In October 2011, the Dutch consumer organisation Consumentenbond concluded from research that the websites of mobile telecommunications providers are difficult to fathom and advice in telecom shops is not always reliable. Combined with the lack of a good explanation when the changes were introduced, this has led to a lack of understanding and mistrust, as a result of which politicians and consumer organisations are keeping a close eye on the developments on this young market.

In order to improve transparency, the Dutch Ministry for Economic Affairs, Agriculture and Innovation, together with OPTA, has made it compulsory for all providers to include comprehensive tariff information on their websites in a place where it can be found quickly. The Dutch Lower House has also urged companies to prevent consumers being confronted with bill shocks as a result of data use. This has led to a self-regulation programme under the guidance of the Ministry for Economic Affairs, Agriculture and Innovation. 

Telecom providers have a responsibility to help customers keep an eye on their data consumption and costs, particularly as not all customers are currently familiar with how much data is used when they use apps or the mobile internet. 

Studies conducted by Dutch consumer organisation Consumentenbond