Ofcom bans three-year broadband and phone contracts

Regulator also announces 999 text service and rules to ensure quick transferral of mobile numbers between providers Three-year broadband and phone contracts have been banned by the communications regulator Ofcom , with providers now only able to offer maximum contracts of two years. They must also make 12-month contracts available under the new regulations which bring the UK in line with EU telecoms law. The regulations also require mobile providers to transfer customers’ mobile phone numbers to a new provider within one working day. Providers must now pay “reasonable compensation” to customers should they not do so, or if there is an abuse of the process. Ofcom is allowing providers to design their own compensation schemes, but will review them after 12 months to make sure they are adequate. In addition, for those switching landlines steps have been introduced to prevent “slamming”, where a customer is switched to another provider without their permission or knowledge. Ofcom has also introduced an emergency SMS scheme which allows registered users to text the details of emergencies to the emergency services instead of calling 999. The scheme, which has been running on a voluntary basis since 2009, already has around 14,500 users and is predominantly used by hearing and speech-impaired people who find it difficult to use the phone. Ofcom chief executive Ed Richards said: “These changes to the regulations should make it easier for consumers to take advantage of the wide range of competition in the UK communications market. The emergency SMS scheme has proved very successful. It is right that this service should be made permanent in order to safeguard it for the people who depend on it.” Ernest Doku, technology expert at uSwitch.com , said the rules were good news for consumers: “These longer 36-month mobile phone contracts were effectively handcuffing consumers, preventing them from getting the latest phone and saving money for three years. In such a rapidly evolving market nobody can afford to be tied down like this. Ofcom has put the power back into the hands of the people. “Three-year contracts came as a result of the sharp increase in smartphone take-up, which in some cases are worth up to £600. Now providers are required to offer 12-month contracts by law, we are likely to see providers claw back handset costs through higher contract charges.” It also emerged this week that the price of broadband has risen for the first time in five years, as a result of companies encouraging customers to switch to bundles including home phone and digital TV rather than take out stand-alone broadband. Research from Broadbandchoices.co.uk indicates that while headline broadband speeds have increased by 29% since 2010, the cost has also risen by 11% – twice the rate of inflation. Stand-alone broadband now costs £126.49 a year, or £10.54 a month for the first year, compared with £114.18 and £9.51 in 2010. At the same time, broadband speeds have increased from 14MB to 18MB. Michael Phillips of Broadbandchoices.co.uk said: “It is disappointing to see the cost of stand-alone broadband increase after so many years of broadband providers delivering price cuts to consumers. The VAT rise and effects of inflation are taking their toll, but providers are clearly placing a premium on broadband-only deals in their drive to sign up more customers to their bundled packages. “Bundles for broadband, home phone, digital TV and mobile phone services do offer excellent value to consumers but those customers who simply want a broadband-only deal should not be penalised. Broadband has become an essential utility to the majority of households across the UK, and if prices continue to rise we may see a worrying downward trend in broadband subscription across the country – denying access to essential information, communication and financial services that many consumers now rely upon to conduct their lives.” The website said the cheapest broadband and phone bundle is with TalkTalk , which charges a first-year fee including line rental of £190.20; while the cheapest provider of a broadband, phone and TV package is Virgin Media , charging £345.88 for the first year including line rental. However these recommendations do not take customer service into account. Internet, phones & broadband Household bills Family finances Consumer affairs Broadband Internet Mobile phones Telecoms Ofcom Mark King guardian.co.uk

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