Telcos rapped for unclear marketing

The Consumer Association of Singapore(CASE) has criticised the three telcos for not being transparent in the marketing of their 4G services.

CASE executive director, Seah Seng Choon, told Marketing that telcos should be more transparent in the way they market 4G services rather then hide information in the “terms and conditions” sections.

This comes on the back of public confusion and indignation at finding out that their 4G mobile plan might not guarantee them 4G services throughout their contract. This is because telcos are packaging 4G services as an add-on, according to The Straits Times.

For example, several StarHub customers said it was the first time they heard of the payment scheme and had not realized it was in their contracts, said The Straits Times article.

To date, the telco has been offering its 3G customers access to 4G services as a free service but now it will be charging an additional SG$2.14 per month for the 4G offerings. This was said to be a promotional rate, compared to the usual rate of SG$10.70 a month.

A StarHub spokesperson told Marketing that it put up a notice on its website on Tuesday and has been informing their customers about the change via SMS and through their in-coming bills.

CASE’s Seah, however, said that current promotions need to be more transparent still.

“Telcos can definitely be more transparent and upfront in their disclosures and in properly informing consumers of the duration of contracts. When a customer sees a promotion, it does not automatically come to mind to ask the duration of the promotion. For a consumer, it is generally understood as the entire duration of the contract/package they are signing up for,” he said.

He added that extending a promotion just looks like a ploy to acquire new consumers.  When asked if the telcos were marketing their plans clearly enough, Seah said “there’s always room for improvement.”

SingTel and M1 could not be reached in time for this article. Marketing will be updating the stories with their comments later.

In a separate conversation with Marketing, Johan Buse, vice president of consumer marketing of SingTel earlier pointed out the traditionally the telecoms industry has been difficult to market, as telcos are seen as “difficult organisations from a customer point of view."  Buse compared it to the way insurance and finance instituitions are viewed, where there are too many contracts which appear "inflexible.”

This also applies to the pay-TV business, many of which are also operated by telcos.

Earlier this year it was announced during parliament that a new rule was being considered to heed complaints from the public about pay-TV operators. A spokesperson from MDA told Marketing that most standard consumer contracts are often long and drafted in legal language that may not be easy to understand for the consumers.

UPDATE: Telcos respond

However, both M1 and StarHub have responded, saying that their charges have been clearly highlighted.

“Charges for our 4G VAS are clearly highlighted on our original 4G media release in 2012, on our website and in our marketing collaterals. Our staff also explain relevant VAS charges to our customers, which they then sign off on, before their transaction is processed,” said an M1 spokesperson.

“Since the launch of the 4G Speed Boost value-added service in September 2012, we have made available pricing and promotion expiry details within our price plan table on our website and in our brochures. To facilitate the proposed change which will only be effective in June, we are taking steps to inform our customers proactively on the new promotional rate as well as the choice for them to decide whether to take up 4G Speed Boost,” said a StarHub spokesperson.

SingTel did not respond to the matter.