Vodafone concerned over Ofcom contract proposals

News Paul Briden 16:15, 3 Jan 2013

Vodafone is worried that Ofcom's new proposals will cause increased costs for mobile contract customers

Vodafone has issued a statement in response to Ofcom’s proposals which would see contract customers gaining a get-out clause in the event of mid-term price changes.

The network said: ‘We support Ofcom's desire to give consumers reassurance about the prices that they will pay during their contract, but the regulator's proposals risk generating significant confusion and potentially increasing the cost of getting a mobile phone contract for millions of people.’

Vodafone’s primary concern is that the prices charged by carrier networks are not, it says, set entirely by the network and are instead influenced by the costs incurred through various third party companies.

It said that Ofcom ‘needs to understand the difference between the prices that are set by mobile phone companies and those which are not.’

‘We simply do not control many of the charges faced by consumers,’ said Vodafone in its statement. ‘They are set by third parties and mobile phone companies have to pass those costs on or they will be subsidising other companies.'

Citing examples, Vodafone said: ‘Prices set by third parties such as BT, include those for directory enquiry services, premium rate and 08 numbers.’

The network asserted that Ofcom would ‘introduce measures that would effectively prevent any rises in these prices being recouped while customers are still in contract.’

‘We cannot be held accountable should BT, for example, put up the price of calls to premium rate, 08 or its 118500 numbers. Nor can we be expected to swallow that sort of price rise ourselves,’ it added.

 Vodafone also said it is worried that Ofcom’s proposals could overcomplicate the contract market and make things confusing for customers.

It alleged that if the proposed plans were to take effect customers could ‘find themselves paying different prices for different services depending on which third party has recently increased its prices’ and creating a ‘bewildering array of prices for calling different numbers.’

In addition, the company believes that such changes would impact the average up-front cost of mobile phone contracts and introduce an increase across the board, something it cites Ofcom’s own research as indicating because ‘phone operators will have to try and second guess what price increases third parties will attempt to introduce.’

Vodafone states that because the proposals are still in consultation it will be talking extensively with Ofcom to ensure these issues are addressed.

‘We can then move to a solution that rightly protects consumers by giving them a clear understanding of price and contract commitments which we are sure both the regulator and consumer groups want to see happen,’ it said.

It’s likely not a coincidence that Ofcom’s proposals come shortly after O2’s price hikes in December, in-line with inflation. The regulator said it wanted to help customers avoid ‘unfair surprises’.

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