Has telecoms become too complex for consumers?
With an ever-increasing array of products, services and bundles available in the telecommunications market, and in a world in which consumers have limited computational power, it is not a straightforward task to discern the best option.
Does this complexity cause consumer harm, and should regulators do anything about it?
Behavioural economics tells us consumers can be limited in their ability to tackle difficult decisions, and complexity increases the probability that they will make sub-optimal decisions.
Telecoms products are inherently complex, and firms may have the incentive to further increase complexity if sub-optimal consumer decisions increase their profits.
However, complexity may also be an indicator of wider consumer choice, which is itself welfare-enhancing.
Where this increasing complexity of telecoms retail markets is deemed, on balance, to cause consumer harm, behavioural economics provides a helpful framework through which such theories of harm can be identified and tested.
Any regulatory response should be targeted, proportional, and mindful not to stifle innovation and limit consumer choice, especially as the increase in complexity in telecoms markets is often the result of welfare-enhancing technological progress and convergence.
However, well designed and thoroughly tested behavioural remedies can both improve consumer outcomes and increase competition.