Ofgem, the energy watchdog, has published its Retail Market Review, which claims that competition in the UK energy market is being stifled by complicated tariffs and a lack of transparency.
Reacting to the report, Joel Hagan, CEO of Onzo, said:
“Onzo welcomes the attention given by Ofgem to the retail market. However, if the watchdog is serious about driving down costs and increasing innovation, then the industry needs to be structured differently so that barriers to entry are significantly reduced to allow for greater competition. Without structural change, Ofgem’s recommendations will lead to an increase in churn – the number of people switching energy suppliers – with no additional benefits to consumers.
“In my opinion something more radical is required to make a real difference. A pertinent example of radical thinking was the creation of the MVNO (mobile virtual network operator) in the telecoms industry. An MVNO is a company that provides mobile phone services but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service. This is what encouraged Virgin Mobile to enter the market in 1999. Just over a decade later, the company now has more than 4 million customers; and there are now around 30 MVNOs in the UK.”