Transparency in telecom services

Financial Express, May 08, 2018

By Rohit Singh and V Sridhar

An appropriately designed label for broadband services can help consumers select a plan matching their needs.

Thanks to a steep fall in data tariffs, broadband users in India have increased from 269 million (in 2016) to 350 million (in 2017), and are expected to reach 829 million by 2021. However, is there a corresponding improvement in the Quality of Service (QoS) parameter? Anecdotal evidence suggests otherwise, as mobile broadband subscribers continue to experience poor quality of audio/video calls (VoIP/VoLTE) and other services over the internet. Disparity between operator’s claims, in their advertisements, and the actual QoS received by consumers persists. Broadband labels, we argue, can help in addressing many of these concerns.

Consumers usually base their choice for broadband plans on the information available. Typically, it’s the price, usage limit and data speed (for example, 4G is faster than 3G, which is, in turn, faster than 2G) that operators highlight in their advertisements. However, they share little information on other parameters, which are often more relevant. For instance, a person sending/receiving emails and browsing web occasionally might prioritise reliability over speed. Consumers of large amounts of music and video online value higher download speeds, while players of interactive games value upload speeds.

Unsurprisingly, consumers frequently complain about QoS for broadband services, despite subscribing to plans with attractive prices and data speeds. Complaints include data packs running out faster than expected, speeds lower than shown in ads, connections breaking often, and appreciable downtime. Despite the Telecom Regulatory Authority of India (TRAI) mandating minimum QoS benchmarks, testing measures and reporting requirements, QoS in general remain poor.

Operators may not always be at fault. Consumers may erroneously choose data plan unsuitable for their requirement. Consumers may be unaware of being subscribed to automatic software updates, which may consume large amounts of data. So can downloading videos sent by friends. Similarly, locations (like a basement) may result in poor broadband speeds. Operators also face genuine hurdles in obtaining Right of Way for installing cables and towers to improve coverage and connectivity.

Yet operators are arguably to blame on one crucial aspect, i.e. transparency. They rarely share sufficient, relevant and easily comprehendible information with consumers, which results in uninformed choice making. Also, companies rarely highlight the ‘terms and conditions’ applicable, such as a 30GB monthly plan allowing only 1GB usage per day, after which speed falls to near zero and tariff rises steeply. The speeds advertised are not practically attainable, on all devices or across all applications. Most consumers lack skills, time or even confidence to make sense of QoS or billing parameters. This is where informative labels can induce transparency, to enable consumers in making informed choices.

Most consumers are familiar with labels in other contexts. For example, the Bureau of Energy Efficiency (BEE) ‘star label’ can indicate the impact of an electrical appliance on the electricity bill. A study by CLASP—the global voice & resource for appliance energy efficiency policies—suggested that apart from price, brand, product life and technology, energy efficiency rating also influences consumer choice. The ‘nutrition label’ mandated by the Food Safety and Standards Authority of India for packaged food products is helping consumers with special dietary requirements, such as growing children, diabetics, etc. A recent research paper suggested that 86.7% of consumers read nutrition label before buying packaged food. Likewise, the Global Adult Tobacco Survey claimed that 62% of smokers thought about quitting because of the pictorial warning label on cigarette packets.

Thus, an appropriately designed label for broadband services may help consumers in selecting a plan matching their specific needs. Considering this, several telecom regulators across the globe have drafted disclosure regulations. Ofcom, the UK regulator, has suggested a ‘voluntary code of practice’ for fixed broadband users, which envisages to provide consumers realistic information at the Point of Sale and during the contract. The Info-communications Media Development Authority of Singapore specifies minimum QoS benchmarks for broadband services and mandates operators to disclose complete set of information to consumers. The US Federal Communications Commission, in 2010 and 2015, released transparency rules for operators to comply, with the latter prescribing disclosures on network performance and management practices in the form of labels.

India is yet to introduce similar regulations, though TRAI released a consultation paper “Data Speed Under Wireless Broadband Plans” in June 2017, indicating a broadband labelling framework. TRAI recently launched a portal to facilitate transparency on tariffs for telecom services. Labels will be useful to consumers, but they need to meet several requisites. They must provide relevant and accurate information about the service of interest. This could include tariffs, minimum, maximum or average speeds, specific limits (daily usage, download size), possible delays and breaks. Labels would need to be comprehensible like a star rating (as the BEE star label), with additional graphics to mitigate language and literacy barriers.

In addition, while labelling of a physical product is easy, as it may be placed on the body, it is clearly a constraint in case of services. Since the label should be accessible by consumers while using services, it may, therefore, not be enough to display them at retail outlets. One possibility is to embed these labels in operator’s/regulator’s application, to be visible on subscribers’ mobile dynamically. Similarly, it may be unwise to freeze the content of labels, owning to fast evolution of broadband technologies. For labels to remain relevant, TRAI may need to revise the content after a specified period of, say, six months.

A suitably-designed, regularly-updated and effectively-shared label could go a long way in empowering consumers. It will fill a manifest gap in India’s broadband market, where users lack accurate and accessible information to select services that meet their needs and offer them value for money. Labels will bring much-needed transparency and instil consumer confidence in Digital India.

Rohit Singh & V Sridhar. Rohit Singh is policy analyst, CUTS International; V Sridhar is professor, IIIT Bangalore.

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