MCI response to PQ on standardised clauses for non renewal of telecommunications service contracts

05 OCT 2020

Parliament Sitting on 5 October 2020

QUESTION FOR WRITTEN ANSWER

100. Mr Melvin Yong Yik Chye: To ask the Minister for Communications and Information (a) whether telecommunication companies (telcos) have standardised clauses for the non-renewal of service contracts; (b) whether non-renewal clauses that place the obligation on customers to inform telcos exactly seven days in advance before the end of the service contract, or risk incurring a penalty, are in accordance with the principles of contract law; and (c) whether IMDA is aware as to whether consumers experience an increase in subscription fees after the automatic continuation of their service contracts upon its expiry.

Answer:

  1. MCI and IMDA consider it important for telcos to offer consumers flexibility in service termination.  

  2. Current service contracts typically include a notice period for service termination, which may vary across telcos. Subscribers are generally not required to notify the telcos on a specific date in order to terminate their services. IMDA has asked the sole telco that used to have this requirement to exercise greater flexibility, and it has complied.

  3. Service contracts usually span a minimum period, ranging from three months to two years, during which subscribers may enjoy discounted subscription rates. At the end of the minimum subscription period, telco services roll over automatically to ensure that there is no disruption to access. If the service contracts are not terminated or renewed, consumers may see an increase in subscription rates as they will have to pay the non-discounted rates. Consumers will have the flexibility to renew existing contracts or sign up for new contracts any time after the minimum subscription period ends. Some telcos also offer consumers this flexibility before the end of the minimum subscription period.  

  4. To safeguard the interest of consumers, IMDA requires telcos to inform subscribers of key contractual obligations upfront, when they sign up for or renew their service contracts. This includes changes to subscription rates after the minimum period.