Starting this week, a new Telecommunications Consumer Protection Code (TCP) will go into force, radically overhauling the still far-too-complex world of mobile phone and broadband provisioning. Some of the steps will be small, but some will be hugely significant for the majority of users who still get hit with ‘Bill Shock’ on a regular basis.
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Critical Information
Every new plan and service will have to advertise and put upfront any significant conditions that will result in a large bill, the complete opposite of traditional ‘fine print’ practice. This is the single most significant change- providers will have to FIRST say “this service comes with a limited amount of credit to spend on calls, after which you will have to pay over the minimum value of your plan”. The immediate effect will probably hit providers quite hard, as most plans rely on the quick sell and then much quicker (and sometimes absent) explanation of all the conditions, after the consumer has half-way made up their mind to purchase a new phone and service.
The long term effect will be, presumably, to drive an overhaul to how these services are provisioned and sold. It may mean fewer too-good-to-be-true deals (which are often exactly what they seem to be: too-good-to-be-true) and more expensive handsets (since cheap deals on the latest handsets are used as a smokescreen for ruinous ‘cap’ plans) but that may in turn drive down the fervor for buying a new handset every year when the improvements are minimal. Meanwhile, consumers won’t have to be railroaded into two year deals for hopeless plans that quickly turn into a complex nightmare.
No More Caps
A few years ago, the Australian Consumer and Competition Commission (ACCC) demanded that Vodafone remove the word ‘Infinite’ from their cap plans, which promised to be a remedy to the other carriers’ cap plans, by including everything – which they absolutely didn’t. The most common exclusions were calls to 13 and18 numbers, which can include essential services such as the Kids Help Line and Centrelink.
In the meantime, the word ‘cap’ has itself come under the same scrutiny, as the relative value of a cap plan has shriveled dramatically. A typical cap plan from any carrier right now (without a phone included) will cost about $29 for $600 credit, with calls costing 90 cents per minute (plus a 35 cent flagfall). It looks like a great plan, but it really comes to about 10 hrs a month- a lot of talk time, but hardly unlimited. A couple of hour-long calls to technical support can impact that hugely. A family emergency, creating chaos and lots of back-and-forth over mobiles, and suddenly that 10 hrs looks very limited. And once you’ve burned through that 10 hrs, you’re being charged an enormous REAL 90 cents per minute.
SIM-only providers like Amaysim (1300 302 942) and Dodo (1300 192 775) have introduced Unlimited plans that the ACCC have no problem with – precisely because no common call types are excluded, and because text and picture messaging are also free.
The term ‘Cap’ can no longer be used to advertise new offers, a move which has been implemented since September (but only punishable now). Most providers, including Optus, Telstra and Vodafone, have reverted back to ‘Plans’ and ‘Offers’.
Full Disclosure
The rule that will probably have the least impact is one requiring providers to include the previous two months billing information in every bill. This sort of granular information has long been provided as a backdoor for providers to say that they provide a full account of customer usage, absolving them of blame for bill shock.
Adding two months worth of transparency is unlikely to make a difference, given that most people don’t want to have to read a bunch of complex billing info, and don’t need to be told ‘hey! You owe us $700. Too bad, but here’s why it’s all your fault’.
All the same, it’s another step in forcing providers to find another way of doing business.
Another Way of Doing Business
The problem is going to be that the actual mobile networkers (Optus, Telstra and Vodafone) don’t respond to the market- they set it. And it’s not set by supply and demand, it’s set by analyst expectation for profit, and stockholder support (or lack of it) that they’re going to make that target.
All this means that if a network makes its money by levying tons of bloated bills with overuse charges that don’t reflect reality, and it’s told by the regulator to not do that anymore, then they will find another way to make that money. And when a country has more mobile phones and services than it does actual people, and everyone is locked into some contract, where’s that money going to come from?
It’ll come from rising costs elsewhere. Otherwise, all of these companies would collapse tomorrow.
What can I do?
The main thing to consider right now is: Don’t upgrade just yet.
The Unlimited guys like Amaysim show no sign of budging just yet, so they’re still a safe bet. If you’ve got your cap under control, wait to see what nasty surprises the newer plans will have in store before jumping ship.
I need a new phone. 
Consider buying outright, or secondhand. An Android phone or iPhone isn’t exactly a highly mechanical item – a secondhand phone is identical to a newone, beside surface damage and a few less recharge cycles for the battery. Worst case scenario, get a model with a removable battery.
Alternatively, look to guys like iPrimus (1300 516 276) who usually have better value plans, albeit with less popular handsets.
For more information on the best plans and offers, call us on 1300 764 000!