The cost of living crisis.
What Communication Service Providers can do to help their customers cope with the cost-of-living crisis. We’re all familiar with the rip roaring marketing slogans of our U.K. Communication Service Providers – ‘together we can’, ‘The future is bright’, ‘It’s all about you’…but sadly, these no longer appear to ring true for the millions of consumers now facing the cost-of-living crisis, as telecom operators start to increase the financial squeeze on their own customers by driving up prices for Phone and Broadband usage.
With inflation topping it highest rate since 1982, increasing at more than double the rate of basic wage growth, the U.K. in particular is feeling the shockwaves of a cost-of-living crisis more so than many advanced economies. As the Bank of England predicts double-digit inflation by October the imminent future also looks bleak, leaving little choice but for telecoms operators to jump on the bandwagon and increase their prices alongside those of their energy, gas and petrol counterparts.
The result has seen phone and broadband bills jumping faster than even the rate of inflation with three of the UK’s mobile operators raising tariffs by 3.9% earlier this year, warning that many customers’ bills could go up by 9.3% from the end of March, adding an extra £3.50 a month (£42 a year) onto other rising bills; with other industry players following closely behind with their own warnings of imminent rises in contract prices in line with the Consumer Price Index (CPI) rate of inflation.
As far as the customer is concerned, a recent survey from Hyperoptic, stated that more than 9 million customers are unaware of these impending bill shocks with 63% of those surveyed feeling that the increases are unfair, and 48% stating that they would not have signed their contract if they’d known prices would go up.
So, what’s causing these unprecedented price hikes in the telco sector? The main culprit isn’t due to inadequate bandwidth, of which there is no lack, but rather the increase in data usage. According to a spokesperson at BT, the company has seen a 90% increase on broadband usage since 2018 and a 79% increase on mobile since 2019 as customers rely on connectivity more than ever for things like working from home, education online and the growth in TV streaming. To cope with this demand, Communication Service Providers are therefore using the monies gained through price hikes to invest back into their networks, so that they can better cope with this exponential rise in data usage.
However, these imminent costs to millions of telecoms customers can be somewhat offset if the Communication Service Provider’s ensure that these price increases are directly reflected in the
quality of the services being delivered. For instance, operators can offer Spending Caps to limit bill shock and avoid unexpected surprises. A cap limits the amount customers are happy to spend above the monthly plan price and data limit on chargeable services. Customers can edit the cap but can’t exceed it, so they can enjoy total control over the monthly bill avoiding unexpected surprises.
Additionally, the groups feature, also known as family plans, can be a good way to manage the spending in households. The group allowance can include multiple SIMs and facilitate the payments and adding any new members should also bring discounts.
Some operators will also allow users to roll over unused data or allowance into the next month’s bill, either as data, as credits or as a discount. This way, nothing goes to waste.
No doubt during this time, many customers will be reverting to SIM Only deals (1 month contracts), but also keeping their eyes peeled for the best offers in the market, in order to switch provider and guarantee savings. With next day switching for example, it’s incredibly easy to find and switch to another provider within 24 hours. All the customer needs to do is to request a switching code by text and give it to the new provider and the switch is completed within one working day.
If Communication Service Provider’s want to limit this behavior, and ensure better customer retention, it’s vital that they are able to offer flexible plans, relevant schemes and offers and total visibility for their consumers on their spend. Operators who offer real-time charging options are best equipped to provide a frictionless customer experience where the customer can see what is spent and how, as well as the remaining data allowance remaining. Time and again, research shows that customers appreciate having full control and total transparency of their spending behaviors, so implementing these simple measures is a win-win for the Communication Service Provider’s when it comes to customer satisfaction and stickiness.
If Communication Service Provider’s rightly implement any or all of these measures, it will also go a long way in gratifying the regulator Ofcom and senior politicians who have been repeatedly pushing the telecoms companies to promote so-called cheaper “social tariffs” and the future might look brighter after all.
By: Mo Firouzabadian, CEO at Lifecycle Software.
