Orange looks set to be the largest provider that charges an administration fee to issue a migration authorisation code (MAC), which is needed to change service providers with minimal interruption to your broadband. Details of the plans are over on The Times Online.
The first time a customer requests a migration code it will be issued free, but subsequent requests for a new code are going to attract a £12 charge. Another new fee is that Orange customers who do not pay their broadband bill on time will see a £5 late payment charge. Orange states that the reason for the £12 charge is that it costs them each time they generate a code, it should be emphasised that BT Wholesale and Openreach generate the code for free, and service providers have the chance to automate the process reducing the level of human involvement at their end.
We don't know how many customers at Orange request a second or third migration code, but this charge may bring an end to people trying to stimulate Orange into offering them retention deals when the customer really had no intention of moving. Where it will be annoying for the consumer is where they are moving to a new provider and obtain the migration code a bit early, this can be an issue with providers that have high demand and run a queuing system (for example Talk Talk), that may take longer than 30 days to get the user connected. The timing of when you request migration code will be critical, hopefully the gaining provider will provide an accurate timetable so people can judge when to request the migration code.
Orange is not the first provider to charge an admin or exit fee for leaving a service provider, but as the largest it is likely to get the most attention for its move. Exit fees from a service provider carry risks for the whole market sector as consumers may feel locked into a provider unfairly, which will reduce churn, but may as a side-effect reduce the number of new sign-ups. For Oranges existing customer base we do not know for sure whether it is going to apply this charge to those under contract now, and if it does it raises the issue of whether it is a fair change to an existing contract.