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(AUSTRALIA) ACCC REPORT: Millions of consumers will pay more for their mobile phone plans after recent price increases by all three big telco companies, new analysis by they have found #AceNewsDesk report

#AceNewsReport – June.23: 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 Report: Consumers now paying more for mobile plans and 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.

ACCC REPORT:

“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 expiry 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 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.

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.

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,” 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,” Mr Sims said.

“There are still ways to find a cheaper mobile plan but, ultimately, dynamic competitive markets deliver best for consumers.”

Information to assist consumers with choosing a mobile phone plan is available on the ACCC website at choosing a mobile plan.

Telstra’s post-paid plan prices in July 2019 and July 2020Plan nameJuly 2019July 2020Small$50$55Medium$60$65Large$80$85Extra large$100$115

Source:  https://exchange.telstra.com.au/5g-mobile-plans/ 

Notes:  These price increases represent a forced migration. Customers were moved on to the newer, more expensive plans over the three month period to October 2020, with those that chose to do so before then given a credit to offset the price increase for the first 12 months. Telstra simultaneously increased the data allowances on each of its post-paid plans.

Telstra’s pre-paid plan data inclusions and expiry $30$40$50$60Pre-paid max

10 GB

28 days

20 GB

35 days

28 GB

42 days

38 GB

42 days‘New’ pre-paid

10 GB

28 days

20 GB

28 days

28 GB

28 days

38 GB

28 days

Source:  https://www.telstra.com.au/mobile-phones/prepaid-mobiles/compare-prepaid-plans

Notes:  Telstra has moved from a graduated 28/35/42 day expiry schedule based on spend to a fixed 28 day expiry across all plans. This means customers have to recharge more frequently, increasing their yearly spend.

Optus’s post-paid prices in April and May 2021Plan nameApril 2021May 2021ChangeSmall$39$4515%Medium$49$5512%Large$59$6510%Extra large$79$858%

Source:  https://www.techradar.com/au/news/optus-is-jacking-up-its-mobile-plan-prices

Notes:  The new plans are similar in structure to the ones they replace, including unlimited calls and texts, a generous data allowance at full speed, followed by infinite data at a 1.5 Mbps speed cap, and a month-to-month contract.

Vodafone’s post-paid plans in December 2019 and November 2020New plan nameDecember 2019 equivalentNovember 2020 flagshipLite

$40

10 GB, then 1.5 Mbps

$40

10 GB, then 2 MbpsLite+N/A

$45

30 GB, then 2 MbpsSuper

$50

60 GB, then 1.5 Mbps

$55

60 GB, then 10 MbpsSuper+

$60

100 GB, then 1.5 Mbps

$65

100 GB, then 10 MbpsUltra

$80

150 GB, then 1.5 Mbps

$120

150 GB, then 25 Mbps

Source:  https://www.vodafone.com.au/about/legal/critical-information-summary

Notes:  These figures are based on the Critical Information Summaries (CIS) that mobile providers are required to publish. CIS contain the ‘base’ plan features and price, exclusive of any discounting or bonus inclusions a provider advertises.

Vodafone’s pre-paid plan data inclusions and expiryPrice pointPre-paid combo plus (2020)Pre-paid plus (2021) (includes ‘infinite data’)$30

10 GB

28 days

15 GB

28 days$40

20 GB

35 days

30 GB

28 days$50

30 GB

35 days

45 GB

28 days$60

45 GB

35 days

60 GB

28 days

Source:  https://www.vodafone.com.au/about/legal/critical-information-summary

Notes:  Customers who typically recharge at the $30 price point are better off under the new plan. Previously, the $40, $50, and $60 prepaid plans had an expiry of 35 days, requiring consumers to purchase credit about ten times per year. These plans have been changed to a 28 day expiry, requiring customers to recharge just over thirteen times a year. This is a 25 per cent increase in frequency, and for a customer that chooses to remain on their given price/data point, a 25 per cent increase in yearly spend.

ACCC Infocentre: 

Use this form to make a general enquiry.

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