Millions of Australian consumers will pay more for their mobile phone plans after recent price increases by all three big telco companies, according to a new analysis by the Australian Competition and Consumer Commission (ACCC). Since July 2020, Telstra, Optus and Vodafone have increased the price of several post-paid plans, and have effectively increased the price of a range of pre-paid plans by reducing their expiry periods, forcing customers to recharge more often, according to the ACCC.
Telstra, Optus and Vodafone collectively hold 87 percent of the total retail mobile phone market, and have more than 95 percent of the post-paid market.
“Our analysis shows that consumers will now be left paying significantly more for a range of mobile phone plans at Telstra, Optus and Vodafone,” ACCC Chair Rod 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 expiration on 35 and 42 day pre-paid 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 all of its postpaid plans by $6 per month, which is an increase of between 8 percent and 15 percent. There has been no increase, however, in the cost of Optus’s pre-paid plans. In December 2020, Vodafone’s pre-paid plans that previously featured a 35-day expiration were reduced to a 28 day expiry for the same monthly cost. Over a year, this effectively equates to a 25 percent 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,” 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.”
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.
Sims said when markets end up with a smaller group of large look-alike players with stable positions, competition is muted, consumers pay more and small providers offer cheaper alternatives for consumers.
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