Analysis of actual prices paid for communications services is likely to be more valuable to consumers than surveys of advertised offerings and prices. Rapidly increasing number and variety of offerings and prices makes price surveys more difficult and less useful. Historically, a small industry of communications service consultants has provided bill auditing and service-choice consulting for larger businesses. Web-based applications with software interfaces to online communications accounts can scale communications bill auditing and consulting to millions of individual consumers. Look for the growth of mint-like businesses customized for communications services.
More personal information and fewer choices are easier for consumers to process and more readily attract consumers’ attention. “How much did I pay?” “Can I pay less?” These are easily understandable, personally engaging questions. Rather different are other questions: “How much would I have to pay if I were to subscribe to each of a large number of competing services?” The answer to that question usually depends on another subjunctive question: “What would be your pattern of use of some service offering that you don’t currently have?” Projections like these typically interest only economists, not normal persons.
Surveys of advertised prices cannot provide personally relevant price weights. The OECD conducts relatively sophisticated, wide-ranging surveys of communications service prices that are reported in its Communications Outlook (see chapter 7). The OECD calculates price indices using a standard basket of monthly service use. Individual consumers’ patterns of use, in contrast, vary greatly. Other surveys of prices, such as the Irish communications regulator’s call cost comparisons and an independent U.K. company’s tariff compilations, do not attempt to aggregate prices. These arrays of prices require considerable effort to evaluate.
Surveys of advertised prices can easily miss relevant prices. For example, early termination fees for mobile phone service contracts have recently attracted concern in the U.S. Most advertised service offerings obscure early termination fees. Such fees are not included in the OECD’s mobile phone service price comparisons. Franchise fees, device rental fees, activation fees, a variety of taxes, and other charges also appear on communications bills. Data collected from actual bills is a much better source of prices actually charged than are surveys of advertised prices.
An on-line communications bill analysis service could generate information directly relevant to an individual consumer’s budgeting and service-use choices. Average price per minute, per call, and per text message often relate obscurely to the effects of incremental use changes on the total bill. But intelligently programmed bill analysis could answer budget-relevant questions: “How can I change my service use to reduce my bill by $10 per month?” “How much would it cost me to make 10% more mobile phone calls?” With data collected from many users, an online service could identify all charges, including low-frequency charges such as early termination fees. Aggregate bill data would provide a valuable resource for responding to consumers’ service-cost queries and recommending service plan changes, including switching service providers. Unlike services apparently based on lead-generation fees from recommending switching service providers, a web-based, on-line bill analysis service could provide more data-intensive, broader-ranging, more credible auditing and consulting services.