Ofcom is considering changes to regulation that would allow consumers to use their data to get better and more personalised mobile and broadband tariffs.
The communications watchdog says it wants to ensure that subscribers benefit from the increasing trends of data analysis and ensure its regulation keeps on top of changing behaviours.
Personalised pricing would provide operators with the freedom to offer different tariffs for different customers. These prices would be set according to the characteristics and circumstances of the individual in question, based on both existing data and predictive modelling.
While offering different prices to different customers is hardly a unique concept, the use of data analytics and intelligence is. For example, operators could automatically apply student discounts or offer tariffs with more minutes and less data to older customers.
Ofcom says this approach can have both risks and benefits for consumers. Personalised pricing could result in more appropriate and cost-effective tariffs for customers and operators would benefit from reduced churn, increased trust, and potentially more revenues.
However there is also a danger that tariffs become more complex and that some people could end up paying more in the long-run if there is the less incentive to change provider– especially in the era of text-to-switch.
Ofcom also wants to ensure customers are treated fairly and that there is transparency in the way their data is used. It has published a paper outlining the possibility of personalised pricing, customer attitudes towards the practice, and potential concerns.
In a related consultation, Ofcom is also exploring how consumers can share their data with price comparison websites or other providers to receive recommendations for tariffs. It is hoped that this would make it easier for consumers to navigate the marketplace but again the regulator is keen to ensure that customers have control over how this data is used.