Date published: 4 October 2017
Closing date: 31 January 2018
We have completed the substantive phase of our review into the market for the supply of ticketing equipment and systems.
Our review included looking at the supply of ticket vending machines (TVMs), ticket issuing systems (TIS), and, ticket gates. Our review considered whether any structural or conduct related issues in the markets for the supply of ticketing equipment and systems may be distorting competition and having an impact on consumers.
We held 20 meetings with stakeholders, primarily the suppliers of TIS, TVMs and ticket gates, train companies and third party retailers, and a number of other key stakeholders, for example, the Department of Transport and the Rail Delivery Group. We also sent targeted voluntary information requests to 35 stakeholders.
Our review identified the following preliminary concerns:
- The supply chains for the supply of TVMs and automatic ticket gates (ATGs) have a few suppliers and limited new entry or churn.
- There may be a number of barriers which make it difficult for new businesses of products to enter the market for the supply of TVMs and ATGs.
- We suspect that a lack of effective competition in these markets may be resulting in consumer detriment in the form of higher prices, lower quality, and stifled innovation.
- The primary causes of the high concentration and lack of effective competition appear to be:
- Purchasing decisions to award long-term contracts with highly aggregated service packages. We have preliminary concerns that only large suppliers are capable of bidding for these contracts, and, once they are awarded, the successful companies may obtain market power, with wider impacts for the GB market; and
- The complexity of the accreditation process for bringing new retailing products/services to market.
The recommendation of the review was to open a market study focused on the supply of TVMs and ATGs.