Ofcom plans to incentivise telecoms companies to improve customer service

23rd May 2017

Ofcom, which is responsible for regulating the UK’s telecommunications, broadcasting and postal industries, is planning to incentivise telecoms companies to improve their customer service by requiring them to compensate customers who are let down. The plans would mean that customers could receive up to £185 million in compensation payments each year.

Ian Macrae, director of market intelligence at Ofcom, told Business Reporter: “The quality of service in the telecoms sector in the UK is not as high as it should be, and trails behind other sectors.” He pointed out that telecoms came bottom of The Institute of Customer Service’s UK Customer Satisfaction Index (UKCSI) for the second year in a row in 2016. Indeed, only two telecoms companies appear in the top 50 organisations listed in the most recent UKCSI.

Yet consumers rely on their telecoms services, particularly as home working becomes more prevalent. “Two thirds of households say they would struggle to function without access to their broadband or mobile services,” said Macrae. “When we’ve done qualitative research, people say that the disruption and inconvenience caused by these services feels similar to a failure of water supply or a power cut.”

As a result, Ofcom has decided to introduce a number of measures to persuade providers to improve their quality of service, including an automatic compensation scheme. For example, if an engineer didn’t turn up for a scheduled appointment or cancelled with less than 24 hours’ notice, the provider concerned would have to pay the customer £30.

“This should be frictionless for the consumer,” Macrae explained. “If we introduce it as a formal regulation, it will be an obligation for providers to automatically do this, so consumers wouldn’t need to claim anything.”

Ofcom has also committed to publish an annual Quality of Service report comparing all the leading mobile service providers on a range of metrics, including customer service. The first report was published in April this year.

“People don’t have data on the quality of service. We want to provide that information to improve consumer decision-making, and also to incentivise providers to compete on those metrics,” said Macrae.

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