Our top telco regulator has taken aim at deals that offer both power and broadband – labelling them “bundles of confusion”.

Telecommunications Commissioner Tristan Gilbertson has also revealed areas he’ll focus on for his next
two consumer campaigns, once bundling is dispatched.

Bundles are a monthly plan that includes both broadband and power. Contact and Mercury are the two biggest players in bundles, the commissioner says.

Several smaller power companies – and in the other direction, 2degrees, which owns a small power retailer – also offer broadband-power bundles.

Gilbertson did not focus on any particular company.

“In many cases, the marketing of bundled telecommunications services is confusing and lacks clarity on the cost of the various components,” he said.

Another key concern is value for money. Gilbertson told the Herald in some instances, electricity or gas was more expensive when included as part of a broadband bundle.

He said his comments were based on a survey by MoneyHub, plus the Commission’s own work.

His proposed solution, where a provider offers electricity or gas, is for the cost of a stand-alone power plan to be prominently displayed.

Gilbertson said he would initially see how voluntary guidelines worked out.

“But if we don’t get the change consumers want to see, we can convert the guidelines into a binding Commission code,” he said.

Retailers respond

Of the big four power retailers – Mercury (587,538 customers, according to Electricity Authority figures), Genesis (533,515), Contact (441,398) and Meridian (365,565) – Mercury and Contact offer power and broadband bundles.

“Contact offers a broadband and energy bundle to provide convenience for customers who want to manage their outgoings in one bill. We aim to ensure that our bundle pricing is competitive to give our customers value for money,” Contact chief retail officer Matt Bolton said.

“We will work actively with the Commerce Commission to ensure customers of bundled telco products continue to get the information they need to make the best decisions for them.”

A spokeswoman for Mercury said, “We welcome the guidelines provided by the Commission and are confident that we already comply with them.”

2degrees inherited a small power retail operation when it merged with Orcon Group last year (Orcon bought Switch Utilities in 2017, which was used for Orcon Power and Slingshot Power bundles).

Numbers are relatively modest (the Electricity Authority puts 2degrees eighth in the market, with 50,904 customers), but after joining forces with Orcon Group, the company has flagged wider broadband-power bundles as a potential way to boost growth.

“We welcome more clarity and transparency around bundles. Ultimately, this will benefit consumers when they are choosing a provider,” a 2degrees spokesman said.

Watchdog’s next targets

Spark and One NZ don’t offer power and broadband bundles.

But all of the more traditional telcos could be back in Gilbertson’s crosshairs for the Telecommunications Commissioner’s next two consumer-focused campaigns.

One will address mobile coverage claims.

The other will lean on telcos to be more upfront about the lifetime cost of a one, two or three-year plan – especially in instances where freebies or discounts are stacked into the early months.

Both efforts are expected to kick off by the year’s end.

Gilbertson (in an earlier life, Spark’s in-house counsel) has pursued several initiatives to address customer service, including a name-and-shame campaign to get hold-outs into the Telecommunications Dispute Resolution scheme, a free service for refereeing customer complaints.

That scheme brought Mercury into the fold, and Gilbertson also pushed telcos to publish “league tables” ranking customer service.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.