Telecommunications companies will be required to spell out all hidden limitations in 'unlimited' data plans for smartphones under new guidelines set by a watchdog.
The Office of the Telecommunications Authority (Ofta) yesterday announced a set of guidelines for telecoms companies to address consumer concerns over restrictive 'unlimited' service plans.
They will take effect in February.
Although service providers promise 'unlimited' data usage in some pricier service plans, some consumers have seen service halt or seriously slow down when they download large files on their mobile phones.
It happens because all telecommunication companies have a set of restrictions called a 'fair use policy' under which - to ensure most customers enjoy satisfactory services - restrictions are imposed on a few particularly heavy users, such as those who frequently use peer-to-peer services to download films.
Each service provider sets different terms. Some reduce the data transfer speed or suspend services of atypical users. Others apply traffic control on all customers during peak periods. Discrepancies over this policy gave rise to 74 consumer complaints filed to the Ofta in the first 10 months of this year.
Under the new guidelines service providers have two choices: either they clearly describe all limitations in advertisements and to customers in person, or they do not apply any fair- use policies to customers who subscribe to unlimited data plans.
Customers must be advised when a fair-use policy will apply, such as whether it would be triggered when phone users transfer more than a certain amount of data in a month. And they should be told the forms of restrictions - speed limitation or restricted access to some software - before contracts are concluded.
The guidelines sought to deepen the understanding of fair-use policies by consumers, the authority said.
'We would like to enable customers to compare the different offers in the market and to make informed subscription decisions,' senior telecoms engineer Chew Tze-shing said.
Companies will also be banned from suspending users' services for excessive data use under the new guidelines. However, they can slow access to a minimum of 128 kilobits per second, meaning it would take a user more than four minutes to download a four-megabyte song. They will also be required to give customers advance notice before triggering restrictions on data use.
Those who break the rules will face fines ranging from HK$200,000 to HK$1 million. Companies who violate the guidelines repeatedly will have their licences suspended.