Price is one of the key considerations in choosing a residential fixed-line broadband service. However, a study by the Consumer Council unveiled that the monthly fees for the same broadband service plan offered by an operator through different subscription channels can be different by more than 40%. In addition, there is slight variation in service offerings such as contract period and promotional offers across different sales channels. Consumers could face difficulties to directly compare the service plans provided by the same operator, and even worse, more challenges in comparing a variety of service plans offered by different operators.
The Council compared the residential broadband service plans provided by 5 operators in the local market and found that the monthly fees, contract period, promotional offers and service terms varied across different subscription channels, including websites, shops, customer service hotlines and street booths.
For instance, for a 24-month 1,000M broadband service plan offered by one operator, public housing tenants are offered a monthly fee of $206 at street booths, but if they subscribe to the same plan online, the fee is $298, approximately 45% more. Even consumers have selected a specific operator, they need to collect information across different subscription channels to identify the most economic platform. If consumers want to compare prices of different service plans provided by various operators, it will be even more complicated and the time taken will be multiplied.
Consumers generally have the perception that street booths offer cheaper service plans, but the study found that only 3 broadband operators used this channel for sales promotion. 1 operator offered online subscribers a concessionary fee almost 20% cheaper than booth price. Another operator provided the same rate for both online and street booth subscriptions, but gave a $20 monthly rebate for online subscriptions.
Furthermore, operators offer service plans with different contract periods across various subscription channels, while some special offers such as installation fee waiver are only available at certain channels. Therefore, consumers are advised to compare prices through different channels and pay special attention to the extra administrative charges, such as deposit or a fee for sending a hardcopy bill by mail every month.
The survey also revealed the inconvenience in enquiring about service plans and pricing information. Whether consumers inquire information through operators' hotlines, booths or from websites, they are generally required to provide detailed addresses, and even to obtain the verification codes via SMS before making one enquiry. This practice has hindered information collection by consumers and make price comparison more difficult.
The most common contract period is 24 months. There are other plans exceeding 3 years with longest term to 40.5 months. For consumers interested in signing up for a long contract term should pay attention to the contract terms in great details. Some service plans levy a $280 to $1,500 relocation charge if a customer moves to a new flat. If an operator is unable to provide service at a customer's new home, the customer can terminate the contract at a cost and the operator has the right to recover the waived installation fee or the value of any upfront gifts.
It is noteworthy that the existing arrangements for contract termination are usually very tedious for customers when their contracts expire. 1 operator provides access to the termination form online, but the customer has to log into the account to download the form. 3 operators require customers to visit one of their stores or call their customer service hotline to obtain the designated form. All operators require customers to return all their equipment to a designated location. However, 1 operator also provides free on-site service at customers' premises to collect the equipment. 3 others charge a collection fee.
In view of this, the Council urges broadband operators to streamline the termination procedures, and one possible measure is to accept termination requests by phone. This would make it easy for customers and also save the company the relative administrative cost in handling termination requests.
In terms of network speed, all 5 operators provide service plans with bandwidth specifications of 500M and 1,000M, while individual providers offer 8M, 100M, 200M, or 300M service plans. Consumers should be aware that the network speed or bandwidth claimed in the service plan refers only to the specific path between the connection socket in the customer's premises and the IP switch installed in the relevant building. The actual network speed depends on various factors, including the data transmission through different routers outside the building, the distance, the frequency of transmissions and the reliability of the underlying network. Therefore, customers may not experience a noticeable difference in network speed provided by 100M, 500M or 1,000M service plans.
Consumers are advised to take note of the following suggestions before subscribing to a broadband service plan:
- To get consumers to sign up, the operators usually provide gifts or monthly fee rebates and market the plan as a "limited-time" or "limited-quota" offer. In fact, there is very little difference between plan details, gifts or offers during different time periods. Consumers need not make a hasty decision;
- Allow time to collect the information needed through different channels. Compare the prices and conditions of the different offers to secure the best deal;
- To avoid a dispute in the future, ask the broadband provider's staff to put all their verbal promises in the contract if you sign it at a street booth;
- For those who pursue "very high" network speed, they have to take note that the actual internet access speed is affected by multiple factors. Consumers should evaluate if more expensive service plan fits your need.