ACM: stricter enforcement of information obligation of telecom companies, further study into the prices in the budget segment of internet services

With regard to the majority of the fixed and mobile telecom plans, their initial contract periods have already ended, and these are automatically renewed. As a result of these so-called ‘sleeping’ contracts, consumers often pay more than those who regularly switch operators or sign a new contract with their current operator. It turns out that this phenomenon particularly affects households with broadband plans in the budget segment (speeds of up to 100 Mbps) as they pay, on average, more than households with faster download speeds. This has been revealed by the “Market Scan of the Dutch Telecom Market” (in Dutch: Marktbeschouwing Nederlandse Telecommarkt), which the Netherlands Authority for Consumers and Markets (ACM) published on 16 January. Following the results of this market scan, ACM will conduct a further study into the prices in the budget segment of the fixed broadband market, as well as into the functioning of that market. In addition, ACM will more strictly enforce compliance with the statutory obligation of telecom operators to inform consumers actively about their contract status and the most-economical prices.

In the market scan, ACM focused on the quality, price, and the selection of both fixed and mobile telecom services for consumers. In that context, ACM used, among other data points, information from telecom operators (such as list prices and invoice data), external studies, and the recently launched annual Consumer Survey regarding the Telecom Market, which was commissioned by ACM.

Results of the scan

The market scan has revealed that fixed and mobile telecom services in the Netherlands are of high quality, and that the Netherlands ranks among the top globally. According to the aforementioned annual ACM consumer survey, which was published at the same time, consumers are, generally speaking, satisfied with the prices for mobile telephony. This is not the case with prices of broadband plans. Many individuals think that those prices are too high.
The competition on price waged among operators takes predominantly place in the form of discounts that consumers receive if they switch operators or sign a new contract with their current operators. However, the consumer survey shows that there are many ‘sleeping’ contracts: the initial contract periods of 79 percent of all fixed broadband plans have already expired. With regard to mobile contracts, that figure is 60 percent.

Budget segment is more expensive than segment with higher download speeds

One striking conclusion of the analysis of the invoice data is that households with broadband plans in the lowest download-speed category (below 100 Mbps) pay, on average, 44 euros per month. This is higher than what customers pay for their plans with download speeds between 100 and 250 Mpbs (38 euros) and between 250 and 750 Mbps (41 euros). ACM additionally sees that, particularly in the budget segment, most consumers have ‘sleeping’ contracts, as a result of which they do not benefit from the discounts that are offered to consumers with active contracts. A comparison with other European countries reveals that the prices for fixed broadband in the Netherlands are higher than in most other European countries. This is particularly the case with plans with download speeds of 100 Mbps. Prices in the Netherlands for mobile telecom are in the middle bracket. However, drawing any conclusions from these kinds of international comparisons remains complicated because of the differences between countries. Factors such as macro-economic conditions, infrastructure, the number of competitor networks, the nature and intensity of competition, the regulatory regime, and subsidies for the roll-out of fiber-optic all play a role in that context. However, the results do warrant a further study into the prices in the budget segment, as well as into the functioning of that market.

Next steps

Manon Leijten, Member of the Board of ACM, explains: “The scan has revealed that the quality of mobile and fixed broadband is high. At the same time, it is notable that, in the budget segment of fixed broadband, prices are higher and we also see many sleeping contracts there. This calls for a further study on our part, especially considering the phasing-out of the copper network, as well as for action on the part of telecom operators to inform their customers better and more actively about their most-economical options. Access to the internet is essential for people’s ability to fully take part in society, and must therefore remain affordable for everyone.”

ACM will also more strictly enforce compliance with the obligation to inform. Operators are statutorily required to inform consumers actively about when their contracts expire. In addition, operators must also inform customers each year about their most-economical prices. ACM sees that, in practice, operators sometimes fail to do so, or do so insufficiently.

Taking out a new plan pays off

ACM advises consumers that wish to save on their monthly expenses to switch telecom operators or to take out a new contract with their current operator as soon as the contract expires. With regard to broadband plans with lower download speeds, consumers may save up to 250 euros per year. For mobile plans, too, taking out a new contract with your current operator or a new one may generate significant savings of dozens of euros.

See also

16-01-2025 2024 Consumer Survey regarding the Telecom Market (in Dutch)
16-01-2025 2024 Market Scan of the Dutch Telecom Market (in Dutch)