InQueensland

NEWS •⁠ POLITICS •⁠ BUSINESS •⁠ CULTURE

Get InQueensland in your inbox Subscribe

Wrong number: ACCC lashes out at 'big three' telcos for massive phone cost hikes

Business

Australia’s big three telcos have shown they don’t care about losing customers to rivals after they each boosted costs by as much as 50 per cent, meaning millions would pay more for their mobile phone plans, according to the competition watchdog.

Print article

The Australian Competition and Consumer Commission said that in the past year Telstra, Optus and Vodafone had 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.

The three hold 87 per cent of the total retail mobile phone market, and have more than 95 per cent of the post-paid market after Vodaphone and TPG merged last year.

That merger was opposed by the ACCC on the basis that there was little incentive for the three companies to compete. The merger was subsequently approved by the courts.

“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.”

The ACCC said that during the past 12 months, Telstra increased its post-paid mobile plan prices by between $5 and $15 a month and reduced the recharge expiry on 35 and 42 day pre-paid plans to 28 days, which effectively equated 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 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 pre-paid 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 pre-paid 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.

“When markets end up with a smaller group of large look-alike players with stable positions, competition is muted and consumers pay more,”  Sims said.

The ACCC encourages Telstra, Optus and Vodafone mobile customers to compare the prices and features offered by smaller providers that re-sell services on the networks of the three mobile network operators.

Small providers offer cheaper alternatives for consumers. Although their plans usually don’t include extras such as access to content, their voice calls, SMS and data packages are similar to those offered by the three networks operators.

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,”  Sims said.

More Business stories

Loading next article