An Early Look: A Post-Brexit EECC

An Early Look: A Post-Brexit EECC

31. March 2021 News 0

With Brexit finalized, concern regarding the future of EECC regulations arise in the UK. In the context of such a major shift, will they forge ahead on schedule or deviate from the original path intended by the European Union?

The Establishment of the European Electronic Communications Code (EECC)

There’s no doubt, the European Electronic Communication Code (EECC) brings substantial changes for the telecommunication sector across Europe and the UK. These changes will affect traditional Communications Service Providers (CSPs) and ‘over-the-top’ service providers alike. Presently, National Regulatory Authorities (NRAs) from each Member State are required to implement the EECC, which entered into force end of 2018 and into national law on 21 December 2020, though many NRAs are late in doing so.

Playing a key role in the EU’s Digital Single Market Strategy, the EECC consolidates four existing European telecommunications directives into one directive:

Framework Directive 2002/21
Sets out the general EU framework for electronic communications (e.g. assignment of radio frequencies, sharing and security of networks and facilities, interoperability).

Access Directive 2002/19
Defines market and competition rules for service providers (typically telecom operators), e.g. when they negotiate network access agreements, interconnections and network investments.

Authorization Directive 2002/20
Sets out a system of authorizations to provide electronic communication networks and services, and rights and obligations deriving from such authorizations.

Universal Access Directive 2002/22
Obliges all providers of electronic communication networks and services to supply certain minimum (“universal”) services.

By doing so, the EU expands the three primary objectives announced for existing telecom regulation: promoting competition, the internal market and end-user consumer protection.

This overhaul of the existing framework will, in some areas, see a significant change to the regulatory framework and will be a material shift to the current obligations and requirements on regulated service providers.

The United Kingdom’s supervising NRA, the Office of Communications (Ofcom), has placed a significant focus on the End-User Rights chapter of the Directive, which contains a plethora of measures to encourage a competitive market and guarantee consumer rights.

The UK’s Post-Brexit Transition Period

The UK, under the post-Brexit transition period active until the end of 31 December 2020, was continuously subject to the rights and obligations of EU membership, including full transposition of EU Directives into domestic law.

Ofcom, with customers of communication services at the heart of their interest, took the liberty to continue transposition as it helped customers get better deals, stating:

“There remains some uncertainty over the UK’s future relationship with the European Union. Ofcom takes no view on the means or merits of Brexit. However, we need to consult now on our proposals to introduce the new protections in the EECC. This will enable us to change our rules before the deadline for transposition of the EECC Directive of 21 December 2020 and still allow UK providers sufficient time to implement those changes by then, should the requirement to transpose Directives still apply to the UK at that time. If, however, the UK is no longer under an obligation to transpose the EECC, there may nonetheless be aspects of this consultation that we would still pursue.”

— Ofcom: Proposals to implement the new European Electronic Communications Code, 17 December 2019

On 2 December 2020, the United Kingdom passed The Electronic Communications and Wireless Telegraphy (Amendment) (European Electronic Communications Code and EU Exit) Regulations 2020, officially fully transposing the EECC into national law.

The UK’s EECC Implementation Process

To make good on their promise to provide UK’s CSPs sufficient time to execute changes, a staggered EECC implementation process divides changes into phases:

Already in force:

  • End-of-contact notifications are mandatory for customers of broadband, mobile, home phone and pay TV companies int he event of their minimum contract period coming to an end.
  • Annual best-tariff notifications on pre-pay tariffs, informing customers about the best tariffs available to them.

As of 17 December 2021:

  • A new ban on selling ‘locked’ mobile devices to residential customers removes potential difficulties that can deter customers from switching operators in hopes of finding a better deal. Ofcom states, “1/3 of customers who had considered switching, but decided not to, said device locking was one of the factors that put them off.”
  • Max contract duration of 24 months for bundled voice and broadband services sold with equipment, where concern lies in a ‘locking-in’ effect, making a switch difficult.
  • Information about the service must be accessible in all forms of communications (except for marketing materials) especially to those with disability.
  • Extended website information requirements include contact details of the service providers, details about quality of service levels and on restrictions on equipment that can be used, and a clear breakdown of charges included within tariff allowances.
  • Customer usage notifications are to be made available when a service is used up and of the charges that will occur if they continue to use the service.
  • Information sharing with price comparison tools that mandates an independent method of comparing similar telecommunications services be made available to end-users.
  • Bundles subject to new telecom rules in the situation where linked contracts with different end dates could act as a disincentive for customers who intend to switch providers until all services are out of the applicable fixed commitment period.

As of 17 June 2022:

  • Pre-contract information to be provided in form of a short summary of the main contract terms as well as a more detailed set of contract information in writing before signage, aimed to help customers make more informed decisions on the service they are choosing.
  • Right to exit if providers make changes to contractual terms mid-contract during the fixed commitment period where the change is not exclusively to the customer’s benefit, purely administrative in nature, or required by law.
  • Right to exit on 1 month notice after fixed commitment period before it automatically rolls on a monthly basis.

As of 19 December 2022:

  • Change to switching and number porting rules from mobile providers and fixed services provided by BT and KCOM to all providers of fixed networks irrespective of whether the switch will involve a switch between different providers and different technologies.

Impact on the UK’s Telecommunications Industry

The United Kingdom joins a majority of EU Member States who have chosen to implement the European Electronic Communications Code (EECC) almost verbatim, as deviations threatened their compliance with the terms of the EU Withdrawal Agreement.

A decision that came with push-back from the industry. Specifically, questions pertaining next steps upon the completion of the transition period, had asked for a selective approach to the implementation process happen immediately. However, Ofcom had decided to continue its transposition in full as any changes would create significant regulatory and legal uncertainty for both customers and providers.

Sure, there will be some discrepancies that will warrant immediate change—such as requirements to notify matters to the European Commission—but the overall message was clear: the new rules are here to stay. CSPs must move to have them implemented and will only be reviewed if market developments or fresh evidence show that a particular requirement is subject for review. For many CSPs, this means significant changes to internal processes, which must be accounted for in the budgets for business and IT change programs for the coming year.

Embracing the Additional Customer Contact

All in all, UK businesses, like their peers in the European Union, must adapt their strategies and organizations to an environment where superb customer experience prevails. Where the advance of EECC is disrupting the industry, the likes of ‘unlocked’ handsets and annual best tariff offers shouldn’t be considered as a thorn, but an opportunity to embrace an additional customer contact that could be monetized.

Best tariff is not an obligation, it’s an opportunity to leverage a new communication channel. Use customer behavior to compose personalized recommendations that provides a smoother buying experience, happier customers and a considerable increases in the possibility of a conversion.

Only vaguely is it defined what a best tariff is composed of, so why not have it aligned with company objectives? According to Ofcom’s updated draft guidance proposed a best tariff should be:

  • The cheapest tariff available to the individual customer;
  • The cheapest tariff available to any customer of that provider (even if the cheapest tariff is only available to new customers of that provider);
  • A SIM-only tariff (for customers currently on a bundled handset & airtime contract);
  • And the provider may also, as one of the three tariffs, provide a cheapest ‘upgrade’ tariff.

The inclusion of three applicable tariffs provides ample bargaining room to offer the highest price to result in a deal, up-sell something highly relevant, or provide an optimal win-back—depending on the individual scenario.

Companies also have the opportunity to improve their value proposition early to attract and retain the best customers—and to identify bold new steps when building offers.

Now is the time to move to action on long-term customer experience strategies.

About Clintview

Clintview is an out-of-the-box simulation and analytics software built for telecom, calculating hundreds of price plan-option-discount combinations to evaluate the next best tariff for each subscriber.

The software works outside the billing system, CRM system or similar databases, unlocking opportunity for experimentation which can even incorporate the comparison of competitive tariff offers, taking full advantage of your data to ensure well-informed decision making.

Its granularity takes usages, hardware, contract period, preferences, etc. into consideration, to provide the most relevant offers, or where usage is not relevant, a series of business and technical rules recommend service packages that are most similar to the services the subscriber wants or currently receives—as required by Ofcom’s regulation.

Automation then streamlines the process taking to focus off operations, but towards campaign synchronization and investigation in improving customer experience.