The Telecommunications Consumer Protection (TCP) code does not go “far enough” to make mobile phone bills simple and transparent for customers, according to the author of a Macquarie University study on bill shock.
Macquarie University reviewed 201 mobile phone bills across multiple mobile operators in August. The study was funded with a grant from Amaysim.
The surveyed bills covered transaction details like number of minutes and how much calls cost “very well,” said David Gray, Macquarie University chief investigator for the study. However, it was difficult to break down “individual items covered in a person’s plan” and compare it to what a customer actually used, he said.
The TCP code, enforced by the Australian Communications and Media Authority (ACMA), started to come into effect in September and will be phased in over time through September 2014.
“I think the TCP code is going in the right direction,” Gray told Computerworld Australia. “The major things we raised were in the transparency and the simplicity of the information and reporting process.”
“The ideal process is that the industry regulates itself,” he said. “But if it doesn’t do it, then it probably needs a push along by the regulator.”
The surveyed bills were issued in August, before several updated TCP code rules related to billing came into effect this September. However, Gray said he has seen bills from the past few weeks and “didn’t notice any differences at all” from the August bills. Another billing change to be implemented in March 2013 for will require bills with an included value plan to include the total amount of the bill for two previous billing periods.
The average mobile bill in the Macquarie University study cost $72.99. The study found that about 40 per cent of surveyed users experienced some level of bill shock, with more than half of that subset facing bills greater than $5 over the advertised price.
On average, the bill-shocked users experienced $28 in additional charges. However, Gray cautioned this may not be an accurate representation of the monthly average for all of Australia.
The most popular price for a mobile phone plan was $59, with more than a third paying that much, the study found. About 20 per cent had a $49 plan while about 9 per cent paid $79. Bill shock most commonly occurred at the $59 price point, with those customers paying an extra $34.58. The users who paid the most for bill shock, $155.58, already had $129 plans.
“The incidence of bill shock amongst each of the major carriers appears to be generally staggered in the same manner as their share of the market,” the study found.
Amaysim, which resells Optus service, believes mobile operators need to rework not just the bills but the plans themselves to increase transparency, said CEO Rolf Hansen.
“The bill is just a reflection of how the product works or doesn’t work,” Hansen said. Many consumers buy cap plans thinking they won’t pay more than the cap, and then get stung with high fees for going over the limit, he said.
Most bill shock results from data
Using too much data was the leading reason a user experienced bill shock, at 43 per cent, the study found. In comparison, 24 per cent went over due to call charges, 24 per cent due to standard text messaging and 19 per cent due to international text messaging.
However, many other users didn’t come close to using all the data included in their plan, the study found. On average, consumers used only 32 per cent of the overall data plan amount. “The few that go over get massively stung,” Gray said.
While data overages were most common, using too many voice minutes actually cost users the most. On average, standard calls produced $43.12 in overage charges while excess data charges cost $22.18 and international calls cost $21.20.
Macquarie University found that 55 per cent of the total bill shock was experienced by women. However, 56 per cent of data-overage bill shock was felt by men. Bill shock occurred most commonly (36 per cent) for people between ages 25 and 39. That age group on average paid nearly $38 extra from bill shock.
Amaysim is seeing an “exponential” growth in data usage, with compound growth of 50 per cent per annum, Hansen said. Carriers are deploying 4G services that let users consume more data faster, he said. “With 4G, this will just go through the roof.”
It’s too early to tell the impact of 4G on the level of bill shock experienced by customers, Gray said. “That could be a future study.”
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