An end to overage on UK mobile phone bills?

Customers must be allowed to specify a limit on their bills, threatening an end to profitable operator custom of charging "overage" on out-of-bundle usage.

Mobile operators in the UK will soon be forced to give customers the opportunity to specify a financial limit on their monthly bill, if a new version of the Digital Economy Bill agreed in the Commons yesterday achieves Royal Assent unchanged.

The latest stage of the Digital Economy bill saw the House of Commons agree, reject or replace amendments to the Bill made by the House of Lords.

One additional element the Lords had proposed was to require mobile operators to always give customers the option to specify a monthly limit on their bills. For the Government, Secretary of State for Culture, Media and Sport Karen Bradley agreed the following in lieu of the Lords’ amendment:

“The provider of a mobile phone service must not enter into a contract to provide the service unless the customer has been given  an opportunity to specify a billing limit in the contract.”

This means that any contract provided to a customer must provide the ability for the customer to specify a billing limit, and to amend or remove that limit.

Operators will also be required to keep customers up to date with alerts if they are approaching their limit, and must “notify the customer as soon as practicable if a limit is reached before the end of the period.

The Bill adds that if a customer continues to use service even after a limit has been reached, an operator may not assume that the customer has agreed to the limit being exceeded.

If, as seems likely, this aspect of the Bill achieves Royal Assent in its current form (it is currently in “ping pong” mode as the Lords now considers the Commons’ final amendments) then it will place a new requirement on UK mobile operators.

In technical terms most operators will not be hugely challenged – most can already provide real time or near-real time visibility into customer usage and expense via convergent billing and charging systems. There may be more challenges in business terms as any assumed profits generated through “overage” – the costs incurred by a user when they exceed a limit within their bundle – will be threatened if users commonly specify that they want their limit not to exceed their bundle.

There will also be some impact on the sales process. Customers will have to be offered the chance to specify a bill limit – so operators will need to work out how best to do this and indeed allow the customer to easily amend and cancel the limit.

Citizens Advice, which has campaigned for the clause, said that two operators already offer caps voluntarily –  “showing that it is both possible and commercially viable.” Extending that to be an obligation on all operators will help to reduce consumer debt , it said.

TMN has contacted UK mobile operators for comment.