Events & presentations

03/06/2003

Speech to ICSTIS: Customers make the best Regulators

Putting consumers in the picture: protecting and empowering in the new communications era

"Customers make the best Regulators"

I'd like first to thank ICSTIS for its important work in building customer confidence in this industry, and for its foresight in focussing on the all-important issue of consumers at today's conference.

Our customers have benefited from amazing levels of investment, innovation, and creativity. In today's competitive markets we have had to put customers first and must continue to do so.

The GSM Industry has been about making exciting, compelling and reliable mobile products and services available at competitive prices, at home and abroad. This is an industry that did not exist 10 years ago ... but today we have 850 million customers world-wide and 50 million here in the UK.

We also know that addressing the potential concerns our customers have about pricing, about privacy, about adult content, and about Spam and scam, is vital to maintaining their trust and confidence in our services and us. ICSTIS's role here is clear and we welcome the part that the Committee has played in regulating new services.

Protecting and empowering customers. Is this happening in other industries? Yes. The food sector has to be active in informing and educating its customers about developments, such as GM foods. The travel industry is looking to equip its customers with the wherewithal to be more discerning as a key to differentiation. In health services, growth is coming from alerting customers to new illnesses or health hazards. Even the financial services industry has come to see that it can no longer rely on customers who don't know their ISA from their PEP.

Is the Communications industry any different? Yes. As the title of this conference suggests, this isn't just an industry but an era, and we are all experiencing an explosion in both knowledge, and impact, the likes of which we have not seen before. Three-quarters of my customers did not own a mobile phone five years ago, and yet I see reports that people now grieve when they lose their phone. Some see their handset as an almost physical appendage to their bodies.

I can remember seeing my first fax machine. It was the size of a van, and sent one page in about 2 hours. Now we enjoy a choice of many dozens of TV channels, hundreds of radio stations, tens of thousands of magazines, and billions of web pages. We can access the Internet through our TVs, from our desk-tops, or using mobile devices like this O2-XDA, or, standard mobile phones. With my mobile I can talk to people, text, chat, play games, bank, transact, get entertainment and information, surf the web, take pictures, listen to radio, email and on it goes. The opportunities and choice I can exercise now are truly amazing.

Communication has become two-way, beyond the home or office and is more than voice. This is really new. Communications are active, and interactive. Using this cameraphone, I can record and send you a video clip ... Now.

It wasn't so long ago that moving pictures were something I saw at the cinema, or had a choice of only two TV channels on TV at home. I didn't have much control over that.

Do consumers need our help in understanding this, in finding their way through to what is best for them? It is certainly a complicated and fast-changing world, and the only true answer is that some will, and some won't.

In fact SMS texting is the overwhelming testament to customers discovering the benefit of technology by themselves, with very little help at all from us - and when I say "us", I mean industry, consumer bodies, and regulators.

In recent years, customers have become more discerning, and less cowed by our technology. The pace of change has been so fast that most people no longer fear the need to understand or keep up.

This is probably a good thing, but has left a widening gap between technological capability and public understanding or appreciation. When I look at the mobile industry in 10 short years it has evolved from analogue voice, through digital GSM, GPRS, and now 3G. From SMS, and WAP, to MMS. It is not patronising to suggest that most could benefit from more information and guidance that is more accessible and easy to understand.

But what?

We can talk about informed choices, about consumers exercising their "demand influence" over the supply market. We will certainly hear a lot about "media literacy" in a more complex communications age. "Convergent channels", and "price transparency" are rarely far from the lips of people in this industry.

Actually this is all gobbledegook. When my student son is thinking about what to buy, he doesn't talk about media literacy, or price transparency? When my elderly aunt is persuaded to use the internet, she doesn't ask about convergent channels. When people buy my mobile phones they don't ask me whether it is GPRS, GSM or UMTS, frankly most do not want to be technologically aware.

We simply need to think about the practical steps that make people happy to use our products and services - and ultimately use them more.

Our customers, be they mobile phone users, viewers, listeners, readers, or surfers want to enjoy the newest, more sophisticated, highest quality content that we can give them.

We have been quite good at this - In the UK we generated more than seven million premium texts from football fans during the course of the season. Arsenal's international fan base also took advantage of ring-tones, match analysis and comment, text alerts and votes, and multimedia messages via their mobiles.

By and large they know what they want. They know what they don't want. And they know how much they want to pay for it.

OFTEL said in a press release a couple of weeks ago that would "open up the PRS range '0908' for 'Sexual Entertainment PRS' services, as the '0909' range is nearing exhaustion." My mind boggled at OFTEL being interested in anything that was exhausted by sexual entertainment, but more seriously: we know that there is huge demand for a wide range of content, whether it is personalised, location based, delivered by SMS, or in chatrooms, or via the internet.

Until recently, black & white small screens and text based technology have limited the type of non-voice content for adults. More capable mobile devices and access to colour images via WAP or MMS animations and even video streaming, vastly increase the availability, and therefore risk of inappropriate access! The successful launch of GPRS not only provides direct mobile access to the Internet, but also at much higher speeds.

Nobody wants the networks to be judge and jury of content, an arbiter of taste, or a moral judge of customer demand (as long as it's legal!) but we do want to behave in a responsible way towards the vulnerable.

Mobile phone operators now have a responsibility as content providers. That is why we are in discussion with ICSTIS, OFCOM, the DTI, the Home Office and other Government Departments to ensure that access by minors to inappropriate or illegal material is as difficult as it is via any other medium. But defining a mobile "top shelf" or "watershed" has its challenges!

We are also forming jointly beneficial relationships with other kinds of stakeholders - those that have spent a huge amount of time working in the fixed-line world, like the IWF, The Cyberspace Research Unit at the University of Central Lancashire, and the NSPCC.

Industry is working with Government to agree a Code of Practice with all the mobile operators. This will include giving parents the ability to block adult services on new mobile phones and a classification or labelling of material offered, that mirrors existing systems, rather than confuses customers by inventing something new. We expect to be able to agree and introduce the Code shortly.

In practice what will this mean?

We are developing barring facilities for parents and guardians - and other blocking and filtering enablers to prevent access to '18 plus' content.

We will be introducing with our partners a system of Rating or labelling of content that people will recognise and easily understand.

Shortly we will launch our facility to allow barring of adult SMS text messaging. We will continue to develop enablers for WAP and MMS and will be bringing those on stream in the coming months.

As a member of IWF, O2 will comply with the best practices of the Internet Watch Foundation, to prevent the availability of illegal web based content, by introducing mobile 'notify and take down' procedures.

We are also developing with other UK mobile carriers a common mobile short codes, which will from this month go some way to help people better understand and use text based services.

And of course, we need to make our customers aware that we are doing this so that they can understand the risks, and the mitigations available.

And, perhaps, just as importantly, what we cannot do. One on one communications are not covered, as they remain a private matter for the individual. Nevertheless, customers - and in particular parents - need to be aware of the potential hazards around peer to peer communications. We have in place robust procedures for nuisance calls as well as a programme of going around schools to discuss nuisance calls, hoax calls and sms / wap / internet chat rooms.

We should note that the work the mobile industry is doing to protect the vulnerable, is not just about pornography, but also age-controlled content such as gambling.

These mobile trends should represent an opportunity to act proactively and responsibly for the benefit of parents and children

On another angle, we must not be afraid of creating a whole bunch of fun interactive, educational etc services for children while protecting them as well. If we develop really good stuff for kids this will be the best distraction from the bad stuff!

On price-transparency, there are concerns. Whether it is encouraging mobile users to send multi-media messages, or viewers to press the TV red-button, customers generally need a clear picture of what they pay. This is not only good for consumers - particularly those on low-incomes - but also makes the market more efficient.

Whilst promoting competition, the mobile operators have made considerable efforts to simplify and make costs transparent for their customers. For example, by charging the same price for calls back to the UK and within country regardless of which European country the customer may be in. O2 lays out very clearly its roaming prices on its website and has also had them independently audited for clarity and comprehensiveness as part of a scheme from our European trade association, GSM Europe. O2 operates a simple charging scheme by grouping countries into only six world zones, each with flat rate pricing so it doesn't matter what time of day you call.

Spam is a good example of where we know we have to act. Unwelcome unsolicited text messages threaten the popularity of the mobile data medium as much as web based email is suffering. We will do what we can to minimise this.

So we, in the industry know that we thrive when our customers are empowered with both information and mobility. We are investing in the means by which our customers can make informed choices about the content they receive. We are doing what we can to simplify and help people understand our products and prices.

Why are we doing this?

The reason is because customers make the best regulators.

Expectations are high for the new regulatory regime in the UK, and we are keen for our part to work constructively within it. One thing we do know is that putting customers first is what will make the communications industry successful. We must have confidence that enabling them to drive the industry, rather than the regulators, or us is going to be in all our interests.

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