Restrictions on tariff increases would hit TIM the hardest, with the operator having already announced plans to implement a CPI+3.5% uplift
A proposed update to contract rules: On 11 April 2023, AGCOM launched a public consultation on changes to regulations governing contracts between operators and end users for the provision of telecoms services in Italy. AGCOM’s Council approved the move a week prior, stating that revisions to the rules were necessary to implement ‘innovations’ introduced by the European Electronic Communications Code (EECC), including information obligations, maximum contract lengths and rights of withdrawal. AGCOM has therefore proposed a number of changes, for example that contracts must outline the compensation due to consumers in the event of failure by an operator to meet obligations relating migration and number portability. The regulator’s suggested rules would apply equally to standalone services and to bundles of different services and equipment.
Prices would not be able to increase by more than inflation: Arguably the standout proposals in the consultation relate to the ‘periodic adjustment’ of contractual prices based on the Consumer Price Index (CPI), a practice that has drawn fierce criticism from Italian consumer bodies. For all new contracts, the application of an inflation-linked price rise may not occur in the first 12 months. For existing contracts that do not allow for this mechanism, AGCOM has proposed to ensure that it cannot be introduced without a consumer’s express permission – which may not always be granted. Where index-linked pricing is already present in an end user’s contract, operators may not modify their tariffs by more than the CPI. This proposal would impact TIM most significantly as it has announced its intention to implement an annual CPI+3.5% price increase from April 2024 (albeit with a 10% ceiling).
Transparency for consumers is positioned top of mind: AGCOM is also looking to improve transparency prior to a consumer signing up to a contract and within the contract itself, particularly with regard to the measure of inflation used to calculate a price rise, the month the increase is applied and the means of its communication. To that end, details of any tariff adjustment must be highlighted through a variety of channels, including being published on an operator’s website two months before it takes effect and communicated to the customer one month ahead of time. At this stage, AGCOM has not outlined the potential sanctions for breaches of its proposed rules but could conceivably look to other European countries for guidance, such as Portugal where ANACOM last year imposed a total fine of €15m for the poor communication of price rises.
