A few days ago, the Federal Government agreed on the principle of reforming the energy market to further streamline the market. One of the measures proposed is giving customers the option to change operators more easily and at less cost. As in telecoms, customers are often effectively locked into 12- or 24-month contracts from which they cannot escape without incurring significant dropout fees. The telecoms package currently under discussion enables people to break their telecoms contract without cost after 6 months. KPN/BASE has welcomed this agreement and these measures with great satisfaction.
The principle of free choice and an open market
The basic principle of these simple measures is the same: to hand freedom back to consumers.
Without this freedom, in both cases (energy and telecoms), a customer whose consumption habits change will be forced to continue paying until the agreed end of a subscription term that has become inappropriate and too expensive. In both cases, a customer cannot switch to a more competitive product when a new offering appears on the market. In both cases, the consumer loses out.
This will also make the offerings more transparent and comprehensible to customers and also eliminate misleading promotions.
An evolving marketplace, keener prices, improved services
With such a system that gives more freedom to consumers, the two markets will undergo an evolution. The market will become more competitive, to the benefit of every consumer. The price aspect will play a role, and prices will go down but, more importantly, the quality aspect of the services will become even more important. From the moment when consumers can “vote with their feet”, operators will redouble their efforts to satisfy them. And isn’t this what they say they want already?
Additional integration of the self-employed and SOHO/SME players
Self-employed people and very small businesses (SOHO) have no bargaining power when entering into new contracts, not even a fraction of the power wielded by medium and large businesses. Therefore, KPN/BASE believes they should enjoy similar conditions of protection regarding the ability to leave their operator or provider. The telecoms package specifically provides subscribers with a maximum of 5 numbers (therefore clearly representing the self-employed and SOHO) that can be terminated after 6 months at no charge. We are delighted that the Government is adopting this system for energy. The professional market – including SOHO and the self-employed – is a market that differs greatly from the private customer market, and therefore not all of the consumer protection measures should be applicable to it. However, regarding the options for termination and therefore the freedom to change a subscription to one that is more suitable, KPN/BASE believes it is necessary to differentiate based on the ability to negotiate or not.