We are supportive of Ofcom’s desire to encourage consumers to engage with communications markets. However we think that these markets already exhibit a high level of customer engagement, reflecting the gains from engaging, the variety of triggers which prompt engagement (e.g. handset upgrades) and the existing tools for understanding usage and making accurate comparisons. These, together with improvements to switching processes, have lowered barriers to search and switching.
We (and other operators) seek to enhance customer engagement because customers are more satisfied and loyal if they choose the services which best suit their needs and this provides an opportunity to deepen customer relationships and reduce churn (consistent with normal competitive dynamics).
The loyalty shown by satisfied customers should not, therefore, be confused with disengagement – customers who are happy with their service and their supplier may not be very active in regularly “shopping around”. Nor should metrics like tenure be misinterpreted given that long tenure customers may nonetheless be engaged (e.g. by switching tariffs to get the best value based on usage needs or by negotiating discounts).
Any decision by Ofcom to intervene must be made very carefully in order to avoid adverse consequences. Intrusive interventions such as price controls and forced migrations which directly control market outcomes and/or over-ride customer choices are very unlikely to be welfare enhancing.
Download BT’s response to Ofcom’s Call for Inputs
Ofcom is currently consulting on end-of-contract notifications, which it believes will help consumers make informed decisions about their current deal, exercise choice and be protected against unexpected or unwelcome changes. BT already takes steps to ensure all customers receive information, advice and access to deals outside of their minimum contract period. We support Ofcom’s proposal to provide greater clarity and transparency for customers as they reach the end of their contract. We will continue to both work closely with Ofcom as we provide clearer information to our customers about the best deals across landline, broadband and mobile when contracts are coming to an end. We will be responding to the consultation in due course.