ComCom Calls For Better Switching For Consumers

The Commerce Commission wants telecommunications providers to improve the industry switching process following a study showing it is not working as well as it should for consumers.

“We’re concerned that 50% of mobile switchers and 45% of broadband switchers ran into at least one issue when switching and that 29% of mobile switchers and 27% of broadband switchers said the whole experience was so bad they wouldn’t want to switch again in future,” says Telecommunications Commissioner, Tristan Gilbertson.

In addition, the Commission's latest consumer satisfaction report found that 31% of mobile consumers and 29% of broadband consumers have not switched because it requires ‘too much effort to change providers’, even though switching might mean they could get a better service for a better price. 

The Commission conducted its study in response to concerns that switching levels in New Zealand are comparatively low and that consumers are being deterred from moving to competing providers – even in the face of more compelling offers. 

“Most consumers switch to get better price, quality or value – so any actual or perceived barriers that prevent switching also prevent important signals being sent to the market in these areas, dampening competition.”

Mr Gilbertson says a lack of comprehensive protocols between the “gaining” service provider and the “losing” service provider seems to be the central issue with the current switching process, leading to a number of problems, including double billing, unexpected charges, and delays.

“We see an important opportunity for the industry to work towards addressing these issues and we welcome the indications received from the TCF, the telecommunications industry forum, that they’re keen to work with us to explore this further.”

Mr Gilbertson says having a healthy, competitive market means ensuring consumers face no or very low barriers to change between competing products and providers.

“It will take some time to improve the process, but we still encourage consumers to shop around for the best deal for them and, if they want to switch, work with their new provider to help ensure the process runs as smoothly as possible.”

Submissions on the Commission’s Improving RSQ: Switching Issues Paper are due by 17 April 2025.

Background

The Commission’s market monitoring shows that 61% of mobile and 43% of broadband consumers have been with the same provider for more than five years.

Switching in electricity (19% a year) is higher than mobile (6% a year) and broadband (10% a year).

The level of broadband switching appears to be comparable to other jurisdictions (such as the UK on 9% a year) but mobile is lower (with the UK on 16%).

Barriers to switching are being addressed as part of the Commission’s ongoing work to improve retail service quality (RSQ) as required by the Telecommunications Act.

The Commission’s RSQ work covers key “pain points” for consumers including billing, switching providers, marketing, contracts, installation, and performance.

RSQ work to date has resulted in improvements to the Telecommunications Dispute Resolution (TDR) scheme, usage and spend information for mobile consumers, broadband marketing practices, energy/broadband bundling practices, and mobile coverage maps.

The Commission also regularly publishes customer service rankings revealing how New Zealand’s major telecommunications providers rank across a range of key customer service indicators. 

The Commission adopts a collaborative approach to improving RSQ with industry and consumers and anticipates that engagement on switching will identify key parameters for change and an agreed roadmap for improving outcomes for consumers.

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