Smart Data Council Looks to Tackle Broadband ISP Loyalty Penalties
The UK’s Department for Business and Trade (DBT) has today launched a new “Smart Data Council“, which aims to help cut consumer bills, such as by finding ways to make it easier for consumers and businesses to find the tariffs best suited to their needs, or reduce the “loyalty penalty” that customers face when switching providers.
For example, new customers to a broadband ISP, mobile or home phone service frequently benefit from big discounts that are designed to attract them, which often run for the length of your first contract term. After that the price you pay typically increases, often dramatically, and customers who choose to remain loyal (post-contract) may find that they can’t access the same deals as new customers.
On top of that we recently highlighted how far too many broadband ISPs in the UK – particularly larger players – still fail to clearly inform their customers of how much their package will cost post-contract (here). As a result, consumers often feel misled when it comes time to re-contract.
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The new council suggests that the loyalty penalty, the difference between what loyal and new consumers pay for the same service, currently sits at £1,114 a year for households across mobile, mortgages and broadband. But it believes this situation could be improved by harnessing “Smart Data“.
Smart Data?
Smart Data is said to involve the “secure sharing of customer data with authorised third parties to help improve services for consumers“. The government’s DBT suggests that a wider adoption of Smart Data “will make it easier for more consumers and small businesses to switch providers of some utilities, therefore supporting families to save money.”
The aim here seems to be to replicate the success of Open Banking in other sectors, which “could include telecoms and energy“. At present we’re not quite sure how all of this would work in the broadband and mobile sector. The former, with its mass of alternative networks and ISPs working across multiple networks, is also particularly complex and confusing.
This kind of approach might also open the way to so-called ‘Personalised Pricing‘ (i.e. when providers adopt the ability to set different prices for different customers, based on individual characteristics), which often seems to have almost as many pros as cons (here).
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Kevin Hollinrake, Business and Trade Minister, said:
“Smart Data can be a real game changer for consumers across the UK, potentially saving people hundreds or even thousands of pounds a year.
Our new Smart Data Council will build on the success of Open Banking and spearhead measures in sectors like SME finance, energy and telecoms, increasing competition and putting more money in the pockets of consumers and small firms.”
The inaugural meeting of the new council will take place on Tuesday 25th April 2023 next week and the council itself involves representatives from Ofcom, Citizens Advice, Ofgem, various government departments, the Open Data Institute and many more (see below for a full list).
We should point out that, in recent years, Ofcom has implemented various changes to help tackle the current issues, such as the introduction of Social Tariffs and End-of-Contract Notifications (ECN). This system requires all broadband, mobile, phone and pay TV providers to issue such notifications to existing subscribers at the end of their term, which are designed to keep them informed about the best deals on their current provider and to boost switching.
We were also supposed to have gained access to a faster and simpler One Touch Switch (OTS) migration system for switching provider this month, which would have worked across multiple different broadband networks. But sadly the ISP industry is still nowhere near ready and that has pushed the launch back at least 6 months and possibly a fair bit longer (here).
Council Members:
- The Department for Business and Trade
- HM Treasury
- The Department for Energy Security and Net Zero
- The Department for Science, Innovation and Technology
- The Information Commissioner’s Office
- Ofcom
- Ofgem
- The Financial Conduct Authority
- The Competition and Markets Authority
- TechUK
- Innovate Finance
- Icebreaker One
- Citizens Advice
- The Coalition for a Digital Economy (COADEC)
- Open Data Institute
- Ctrl-Shift
- Open Banking Implementation Entity (OBIE)
- The Investing and Saving Alliance (TISA)
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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I don’t think I will bother, more data sharing, just like Open Banking, which was set up to help people, but instead being used for big data.
Never used Open Banking, never going to, would never trust it
What is there to “trust” with open banking? You already trust the bank with all of your details & transactions, adding another banks worth of transactions is the same as if you’d paid with one of their accounts.
(e.g. linking HSBC to Monzo accounts I do, as it gives you trend data / transactional breakdown without having to do any calculations myself)
Seems odd to bemoan something you would never use.
@Matt
But it is not just banks that use Open banking, there are budget apps that use it. Whop says I trust my bank? I have to have a bank account to get paid into and pay bills, but I would not say I trust them. I have been with the same bank for over 30 years, but still no trust.
There is also a loyalty card that from a supermarket that uses Open banking, so they can spy on people’s spending and for that people gets more points. Open banking was not set up for stuff like that, it was supposed to have been set up to help people.
Trusting your bank is the same as believing the prostitute loves you
They just want your money so that they can use it to gamble away and make more money for themselves. Cash and Bitcoin interfere with their status as the middleman that’s why there’s currently talks of phasing out cash (many businesses dont even take cash at all, notably Starbucks). At least they can’t ban maths so Bitcoin is a safe store of value
All we want is good, reliable, broadband reasonable price and it stays that price permanently !
Wholesale price changes, because their costs change. How permanently do you expect them to keep pricing? Because if you want prices that never change, they’re going to be very high to begin with.
There is always someone who comes out with something irrelevant ! I will contact your isp and let them know you like high prices!
How on earth is his comment irrelevant? You want a fixed price for eternity. However the economy and costs don’t stand still for eternity, so it’s economically not possible or a viable business model is it?
What the majority of people realistically want, are fixed prices for the full term of the contract. No inflation or RPI bollocks mid-contract. Suppliers can suck up any cost implications for a customers 12-24 month contract term no problem at all. It’s complete profit gouging by these firms that operate this way.
I’m talking about it staying at a reasonable price permanently as in it doesn’t go up like everything is. I’ve been with VM for 16 years and I was paying £25 for broadband it’s gone up every year and now I pay £59 with a discount of £3 (that’s all they would give me seen they moved to the library global). The way my comment got worded was wrong thanks to auto correct and I have bad eyes. So please try and understand and not have a go !
Excellent comment Karl. If only the governments of the world realised this, rather than milking the system for their own gain by setting up pointless quango councils to do the job of the actual regulator.
You can find that now. Just do a little shopping around. Think the changes, etc, are to make this shopping around easier.
As far as Ofcom go if the regulator is going to police every aspect of broadband service for every player in the market from speed to quality to reliability to price may as well just nationalise BT.
It makes the concept of having multiple ISPs largely pointless and would kill most private investment overnight, before the details even became clear.
Taking the regulation that was on BT and KCom’s telephone services, adding more on top then applying it to every retail ISP would be a nightmare for compliance.
Totally unnecessary when the market is starting to deliver more options and access to reliable services has never been available to more people thanks to full fibre which, whether you believe it or not, is available to over half the UK and rising rapidly.
The groundwork for some element of personalised pricing is already being laid and systems prepared for it.
Variable pricing depending on location is a thing in the United States. I guess at least some think a variation of that is going to be a thing here, too.
Makes sense.
We had that in the UK with ‘Market 1/2/3’ etc.
@HullLad, we still do, but a lot of providers don’t use it now, the system still exists. It was more to do with competition in the area
True, though that was a Wholesale pricing thing. If Openreach are permitted to do the same it’ll be very interesting. It’ll allow them to push full fibre deeper and make a better return on their investment, allow lower pricing in some areas but higher in others.
“smart data” “smart motorways” “smart cities” more drivel that no one voted for doing more things that the government has no business in doing, already covered by private companies (such as broadband comparison sites). Rather than reducing the size of government, it just grows like a tumor slowly encroaching more and more on people’s lives pretending to be a babysitter for the sake of convenience but in reality it is just to give authoritarians more power. Not surprised even the theological “net zero” department is also in on this.
This “smart data” is just a stepping stone to the Digital ID, collate as much data on you as possible under a single government controlled entity (for “convenience” of course) then depending on certain “good” or “bad” behaviors it will affect your social credit score
Come back to this post within a few years
Like how OFCOM who could put a stop to this at a drop of a hat are sitting on this Quango….speaks volumes.