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| (c) StarHub |
It seems that IDA
has been rightly or wrongly perceived as being “pro business” or rather “pro Telco”
judging from the tone of the noise from social media but the landscape seems to
be changing. Just before this article went out, IDA has imposed a record fine
of S$6 million on another Telco Singtel for an extended outage last year.
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| (c) IDA |
The corner stone of this report emanated from a confused public outcry by existing customers of StarHub over an additional S$2.14 fixed monthly charge for the privilege of using the new and faster LTE network. On the surface, it seems reasonable as it is only a fixed monthly charge with no change in the unit rates.
Consumers
perceived ( perception can be more deadly than the truth at times) the
additional charge as unfair because they have been using it for free all this
while. LTE was introduced into Singapore in 2013 with limited geographical
coverage and only became available more extensively in recent months.
It
is common practice for Telco as well as other industry players to introduce
their new products or services for free or reduced rates to attract customers to
latch onto the new service. Another key reason stems from a need to test drive
their various process to make it road worthy. Some of which might include BSS supporting
billing $$$ which is very key as well as OSS for enrolling customers. All these are
not a walk in the park and the back office of Telco can have complexity beyond
a lay person’s imagination. Lastly, some regulators do not allow Telco to
charge until the service is fit for use.
StarHub
was up in arms that customers have been briefed at point of sale that this
service is free for a limited time period only and Starhub reserves the right
to impose additional charges at a future date. In a surprising move, IDA
commented that she is satisfied that StarHub has language in the terms and
conditions signed by customers and secondly had informed customers well ahead of time on
this additional charge. However, there is room for improvement at the point of
sale and IDA announced that will work with Telco to improve and tighten these
procedures at point of sale.
Another
sticky point could be the opt in by default meaning that customers who do not
opt out will automatically deemed to have agreed to subscribe to the LTE
service at additional change. Starhub might argue that customers have already opted in for LTE when they sign-up. Why would anyone refuse a free service?
This
pronouncement is landmark for IDA probably because she might has most probably come to term that if
each and every customer were to read the entire terms and conditions thoroughly
at point of sale, it would result in an untenable cost of transaction both
for the Telco and customers.
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| (c) CCS |
- certain classes of terms and conditions illegal, void, voidable etc. Such protection should only be extended to retail consumers and not enterprise customers on the basis that an unequally yoked contract is less likely with enterprise customers. The question on whether to extend it to SME is debatable. Such legislatures are already in place in the Sale of Goods Act and what might be needed is a more focused legislature to cover situations unique to Telco.
- termination either for convenience or otherwise by either party should have their penalties sand boxed preferably by guidelines from IDA. There have been horror stories from consumers in the past being imposed hefty termination changes that seems legal but hardly equitable. Fixed term contracts are constituted as the language suggest. If Telco makes material changes and/or pricing, it should at least not be applicable to existing fixed term contract consumers. The contracts should tie both parties on an equitable ground till the end of contract. If Telco wants to terminate the contract for convenience, it should pay similar or higher penalty to the consumer at similar rates. Terms and conditions such as Telco reserve the right to vary or change the contract should be the first to be outlawed. Otherwise, why even call it a contract.
- variation of pricing during contractual period should be tightly governed by a set of independent, robust, measurable and attributable metrics. To be fair to the Telco, perhaps they should be allowed to vary prices via independent yardsticks like published consumer price index (CPI) or price of electricity. Telco would challenge that the cost of operations have little to do with such yardsticks but it is perhaps the best available yardstick although it sucks just like what examinations are to students
- limit the use of automatic opt in by Telcos as this can be abused by carriers leveraging on the fact that most consumers might not have read or understood such notices or Telcos making the opt out process so onerous that consumers dispense with it.
- robust and tight tariff filing framework a must to ensure that Telco adhere to fair commercial practices. This is more prevalent in broadband carriers ( lesser extent in mobile operators ) that are perpetually offering discounted prices that are mostly if not always lower than what existing customers are paying. I am not proposing a onerous ‘most favored customer’ like language but an appropriate and transparent tariff filing framework to provide similar cover for existing consumers. Not that tariff filing is a cure all as experience has shown that tariff filing also have loop holes like chaining up prisoners is no guarantee that escape is impossible but makes it less inviting.
lkypeter@gmail.com
Safe Harbor. Please note that information contained in these pages are of a personal nature and does not necessarily reflect that of any companies, organizations or individuals. In addition, some of these opinions are of a forward looking nature. Lastly the facts and opinions contained in these pages might not have been verified for correctness, so please use with caution. Happy Reading. Peter Lye
(c) Peter Lye 2014