Australia’s three biggest telecommunications companies (Telstra, Optus and Vodafone) have all announced price increases for their mobile phone plans, and the Australian Competition and Consumer Commission (ACCC) has announced a sneak trick they are using that means price rises will still hit those on prepaid plans.
Telstra, Optus and Vodafone collectively hold 87 per cent of the total retail mobile phone market and have more than 95 per cent of the post-paid market.
ACCC chair Rod Sims said that the big three telcos have increased the price of several post-paid plans, while making prepaid customers pay more by reducing their expiry periods, which forces customers to recharge more often.
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“Our analysis shows that consumers will now be left paying significantly more for a range of mobile phone plans at Telstra, Optus and Vodafone,” Mr Sims said.
“The behaviour of the three big telcos would suggest they are not concerned about losing customers to rivals.”
During the past 12 months, Telstra increased its post-paid mobile plan prices by between $5 and $15 per month.
Telstra has also reduced the recharge expiry on 35 and 42-day prepaid plans to 28 days, which effectively equates to a price increase of between 25 per cent and 50 per cent over a year.
In May, Optus raised the price of its post-paid plans by $6 per month, which is an increase of between 8 per cent and 15 per cent. There has been no increase, however, in the cost of Optus’s prepaid plans.
Vodafone’s post-paid plans have also gone up by between $5 and $40 a month, however, the increases are currently accompanied by heavy discounting and temporary bonus inclusions.
In December 2020, Vodafone’s prepaid plans that previously featured a 35-day expiry reduced to a 28-day expiry for the same monthly cost. Over a year, this effectively equates to a 25 per cent price increase.
These mobile price increases follow the merger of TPG and Vodafone in 2020.
“The ACCC opposed the merger of TPG and Vodafone because we were concerned it would lead to higher mobile prices, and result in three similar providers with little incentive to compete strongly,” Mr Sims said.
“Despite evidence showing the three mobile network owners reacted strongly to the potential competitive threat of a new TPG network, the court considered that the merger would be pro-competitive, allowing Vodafone to compete more effectively against Telstra and Optus.
“When markets end up with a smaller group of large look-alike players with stable positions, competition is muted and consumers pay more,” Mr Sims said.
What you should do
The ACCC recommends investigating and exploring switching to smaller providers that resell services on the networks of the big three providers.
Many of these smaller operators offer cheaper alternatives, although it is important to compare the prices and features as a lot of these plans don’t offer access to content, voice calls or the same SMS and data packages of the larger operators.
The ACCC believes that Telstra, Optus and Vodafone customers could save between $5 and $25 per month, and possibly more, by moving to a different provider with comparable data inclusions.
In light of Telstra, Optus and Vodafone offsetting recent price increases with higher data allowances, the ACCC also encourages consumers to check how much data they typically use and choose a plan that covers only the data they need.
According to data released as part of the ACCC’s latest Internet Activity Report, the average mobile phone user in Australia consumes less than 15 GB of data per month.
Plans that include at least 15 GB of data, as well as unlimited national calls and texts, can be found for as little as $25 per month.
“We suspect many customers who have recently had their mobile provider justify a price increase with higher data usage would prefer the previously available lower monthly fee in exchange for a lower data allowance,” Mr Sims said.
“We want all mobile customers to know that switching to a new provider is a very simple process, and the new provider will move your existing number over for you.
“Before changing over, we encourage consumers to compare different providers’ geographic coverage, and consider their individual needs, as not all providers offer the same coverage.
“There are still ways to find a cheaper mobile plan but, ultimately, dynamic competitive markets deliver best for consumers.”
How much has your mobile phone plan increased in the past 12 months? Have you shopped around for a better deal? Which provider do you use? Would you recommend them to others? Why not share your thoughts in the comments section below?
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