Understanding the consumer, reaching out, staying in touch

1. Understanding the consumer, reaching out, staying in touch Helani Galpaya @SAFIR Course on Infrastructure Regulation 6 March 2013 Thulhiriya, Sri Lanka The work is carried out with the aid of a grant from the International Development Research Centre, Ottawa, Canada (www.idrc.ca)

2. WHY should you (stay in touch, understand and reach out to..)?

3. Consumers matter • 1. To create a space for yourselves between government and utilities • Regulator as advocate for consumers (give them “voice”) • But consumers as advocate for regulator also • 2. Consumer is an essential part of sector development • DSM as part of sector strategy • To address national level climate change concerns • Inform  Empower • Need to know what the consumer consumes, how their needs are being met (by suppliers), what they like/dislike, how they might respond to various initiatives

4. What do you think consumers want? • To have supply • To have low prices • To have good quality (reliable) supply commensurate with price • To have service/product choice/variety • To have recourse (legal /+ financial) when above things are NOT delivered • How do you make sure all/none/some of the above are being delivered to consumers • How do you “know” it’s being done

5. Monitor, measure, report, act • What gets measured gets improved • Identify key indicators • Collect data against these indicators (who collects?, when?, how?) • Analyze this data • Make the data public (empower consumer; empower the regulator) • Do you/can you do this (under your regulatory frame work)? • Telecom sector appears to do this reasonably well; Can electricity improve?

6. Examples from Telecom Regulatory approaches to consumer-centric performance of suppliers in telecom

7. At a minimum, set up the rules/regulations related regulator’s role in ensuring quality • India: Consumer Protection from NTP 2012 6. QUALITY OF SERVICE AND PROTECTION OF CONSUMER INTEREST 6.1. To strengthen the regulator for ensuring compliance of the prescribed performance standards and Quality of Service (QoS) parameters by the Telecom Service Providers. 6.2. To formulate a Code of Practice for Sales and Marketing Communications to improve transparency as well as address security issues relating to Customer Acquisition. 6.3. To support the sector regulator in its efforts to enhance consumer awareness about services, tariffs, and QoS. 6.4. To make mandatory provision for web based disclosure of area coverage by telecom service providers. 6.5. To facilitate establishment of a National Mobile Property Registry for addressing security, theft and other concerns including reprogramming of mobile handsets. 6.6. To undertake legislative measures to bring disputes between telecom consumers and service providers within the jurisdiction of Consumer Forums established under Consumer Protection Act. - But “Codes of Practice” does not automatically result in good practice in real life - Customers unwittingly signed up for VAS

8. Next step is setting minimum performance benchmarks. India (TRAI) has done this. • Not just network level quality standards • Among customer-level indicators are: • Error rate in billing • Resolution period for billing errors • Time taken for refund of deposits • Customer call center response times Source: TRAI Performance Indicator Report, July-September, 2012, http://www.trai.gov.in/WriteReadData/PIRReport/Documents/Indicator%20Reports%20-%20Sep_2012.pdf

9. Bangladesh too has defined benchmarks and methods • Multiple indicators each for: call center response times; bill error rates; network performance; Complaints/repairs • Even provision for “customer perception of service” Great detail in draft. But not enacted yet Source: http://www.btrc.gov.bd/jdownloads/Current%20News/draft_national_telecommunication_consumer_protection_guideline00.pdf

10. Beyond defining indicators: collecting data, monitoring, acting on the indicators

11. Beyond paper, regulator needs to actively collect data – easiest is to collect from operators (suppliers) • Operators have access to indicators that can helps regulators understand customer service and satisfaction • But most regulators don’t demand/collect such data • Instead, limit reporting to indicators that give insight into supply-side only • E.g. 1: Telecom Regulatory Commission of Sri Lanka (TRCSL). • Revenue, subscriber numbers, etc. collected and made public (http://www.trc.gov.lk/statistics/statistical-overview.html) • E.g. 2: Bangladesh Telecom Regulatory Commission currently focuses on number of SIMs/connections • Hopefully will change after new rules/regulation related Customer Care Standards passed. • India too collects supply-side indicators. But some indicators that hint at quality different?

12. TRAI collects from operators and makes public (at least) a summarized version. Some customer-centric indicators can be found The performance of wireless service providers in terms of QoS as on September 2012. Source: TRAI Performance Indicator Report, July-Sept. 2012.

13. Regulator can measure directly • Install equipment on operator networks • Direct measurements • Need operator assistance

14. Regulator can directly measure quality without relying on operator. E.g. TRCSL Broadband QoS • Tested at random locations using computer running software for 24 hours • Results published on TRCSL website • Data used by operators in marketing material

15. Consumers can use data to make broadband choices since suppliers are named along with whether they meet “acceptable” performance

16. Crowdsourcing: consumers can measure performance. Success depends on large number of consumer participating • LIRNEasia tried. But gave up. • With IIT-Madras, developed downloadable software to test BB quality • Recruited volunteers to install and run the app on their computers • Data automatically loaded to www.broadbandasia.info • But reliability of data depends on having large numbers • Outliers (extreme poor/good performances can be ignored; averages can be taken; regional/city-level data can be analyzed) • Not easy to get volunteers (Even though it takes 5-15 minutes of their computers processing power) • But many other crowd-sourcing applications work, quite well • www.ipaidabribe.org: name and shame. Now used by government to identify offenders • www.tripadvisor.com: ratings by travellars on where to eat, sleep, shop, visit • www.wikipedia.org: everything about everything, by anyone who has the time/interest

17. But not impossible in telecom. Regulator can facilitate. OFCOM (UK regulator) does, though at high cost • Broadband speed testing done by OFCOM • Users volunteer (via webpage sign-up) • OFCOM sends small “gadget” to install at home • Gadget takes broadband speed readings, transmits to database • Data public

18. We could also ASK the consumer if they are happy with service, how it could be improved • In a competitive sector, telecom operators themselves have incentive to do surveys and improve • E.g. Bangladesh operators regularly conduct surveys on customer satisfaction with network coverage, payment methods, VAS, contact centers etc. • In the UK, while telecom operators do their surveys, the regulators also does it • E.g. OfCom conducts routine survey on consumer satisfaction with broadband quality

19. Overall satisfaction with customer service by fixed broadband provider

20. Tradeoffs in different ways of monitoring & ensuring quality +++ High ++ Medium + low - none

21. Examples from Electricity What attention is paid to customers (quality, satisfaction) in the electricity sector?

22. Incentives to care about quality – “voice” and/or “exit” • Telecom: • Multiple suppliers, mostly private sector suppliers • Exit (consumers switching) a real threat to suppliers • Therefore, incentive for improving quality built in? • Operators have more incentives to improve consumer “voice”? • Electricity: • Mostly monopoly distribution; state owned supply (LK, BD), some private sector participation (IN) • No exit option? • Does consumer “voice” matter • Role of regulator (in giving consumers Voice) more important when Exit is not an option

23. In Sri Lanka, attention today is mostly about supply-side performance measure • Monthly purchases from Generation Licensees (including SPPs): Peak demand • Monthly purchases from Generation Licensees (including SPPs): Energy • Monthly sales by Transmission Licensee: Coincident Maximum Demand • Monthly sales by Transmission Licensee: Energy • Monthly sales by Distribution Licensees: Energy • Monthly sales by Distribution Licensees: Max Demand & number of customers the category • Monthly sales by Distribution Licensees: Energy sales to other Distribution Licensees • Indicators on network reliability • Daily purchases from Generation Licensees (excluding SPPs): Capacity • Daily purchases from Generation Licensees (excluding SPPs): Energy • Monthly cost of generation purchases

24. Some supplier-collected indicators can and do hint at consumer (demand-side) performance. Regulator could use these (at granular level) • Average time taken to resolve a fault • If reliably reported by DistCo’s, time series data can indicate improving/deteriorating service quality experienced by consumers • Network performance and reliability: • Systems Average Interruption Duration Index (SAIDI) • Systems Average Interruption Frequency Index (SAIFI) • Can be granular, depends on where they have monitoring equipment. PUCSL compares regions. But suppliers should know more.

25. Customer focus by regulators is improving • Sri Lanka • PUCSL in the process of defining Supply Services Code • Codes of conduct for Dist Cos • Everything from handling interruptions, how to contact the supplier, metering, billing, connections & disconnections, etc. • To be approved soon (hopefully) • PUCSL also conducting country-wide consumer satisfaction survey of electricity consumers • Tomorrow, a short presentation by MrDamithaKumarasinghe, DG, PUCSL on partial/initial results

26. Bangladesh • No specific customer focus…yet. • India • Regulatory instruments should (in theory) enable customer focus, as per Mr. Shantanu Dixit • More on this in Mr. Raj KiranBilolikar’spresentation (next) • What are regulators doing, in practice? Not much, as per Mr. Dixit • What good practices are emerging? And by whom (is regulator facilitating voice? Or are suppliers?) • Mr. Raj Kiran’s presentation (tomorrow)

27. Third parties are also in the game. E.g. NGOs, consumer interest groups, think-tanks • LIRNEasia is studying customer life cycle management practices in telecom, electricity and e-Gov sectors • In India, Sri Lanka, Bangladesh • Specially as pertaining to urban poor and micro entrepreneurs (MEs) • Sample survey and qualitative research protocols attempting to find answers to: • What services are used and why • What are the barriers to entry • What are the satisfaction levels with each customer touch point (at service application & initiation; bill payment; dealing with a customer center for problems, service exit; etc.) • Ideas for improving services • Qualitative research to ask WHY the survey results data looks a certain way • See you in 6 months with results

28. A mix of methodologies to paint the full picture. Tradeoffs in cost, time, reliability • Relying on operator to monitor and send report • If you trust suppliers – great. Low cost to regulator • But how granular can data be? • Regulator conducting tests (random sampling or installing equipment in supplier network) • Can be intrusive and costly; but also more reliable? • How granular? • Crowdsourcing/getting users to test and report • Great if large numbers of volunteers can be signed up • High coordination costs, but easier with SMS (for perception measures)? • Directly measures customer perceptions (or actual experience) • User surveys conducted by suppliers/regulators/others • Can contain costs if regulator uses existing government resources (use of NSO) • Great for understanding customer experience. Indicators no other method can give • But need other analysis to figure out “why”

29. WHEN should regulators pay attention to quality? • From day 1 of sector development/privatization/liberalization? • Or wait until other objectives are achieved? • Allow suppliers to invest in network expansion (or generation capacity, or other supply-focused investments • Focus initially just on getting consumers on the grid (or getting people a SIM card) EVEN if the supply quality (or call quality/broadband speeds) is not perfect • Enforce quality/customer satisfaction standards after sufficient competition, sector development? • Sri Lanka: Doing well on many other indicators (electrification levels high; reasonable, etc.) • Now we have the “luxury” of focusing on customer satisfaction? • Bangladesh: Very low electrification, frequent outages, etc. • Focus on those things now…until? • India: Most evolved in terms of private participation. • Mr. Raj Kiran Bilolikar’s presentation • Does customer-focus depend on private vs. state investment? Or other factors

30. Not just a number: other customer-centric services regulators provide

31. Regulator as first and last resource • First, because consumer rights can be (and should be) defined by regulator • Last, because regulator has to step in as mediate, arbitrator • when suppliers don’t pay attention to consumer grievances • When suppliers actions are insufficient to compensate consumer losses (in the consumers eyes)

32. Do consumers know their rights? Do they know what the regulator can/will do? How can they reach regulator? • Is the information available? Where? In what languages • Do consumers know how to contact the regulator? • Regulators contact information printed in the bill? • Can websites be effective in communicating this? Who uses the web? • Does the regulator insist on specific forms of communication? • Can we ask consumer to use websites? • Poor people rarely use. Need alternatives for them (can mobile/IVR be one?) • What is the burden of proof and who bears it?

33. Sri Lanka receives complaints, and mediates where necessary • Dispute Settlement in Sri Lanka • A published Statement of Rights and Obligations of an Electricity Consumer • Formulating Consumer Consultative Committees Customer can go to Courts if not satisfied with solution Customer attempts resolution with Utility provider Unresolved issues can go to PUCSL for non-binding mediation

34. Can data generated from this process indicate customer problems of the sector? Modes of complaint receipts by PUCSL Complaints received by PUCSL

35. Transition – Raj KiranBilolikar Rest of this session dedicated to all these matters in india

36. www.lirneasia.net helani@lirneasia.net Thank you