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Millions of Australian consumers to pay more for mobile plans

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Millions of Australian consumers are now expected to pay more for their mobile plans after recent price increases by three big telco companies.  

Based on a new analysis by the ACCC, it has been found that Telstra, Optus and Vodafone have increased the prices of several post-paid plans since July 2020.   

The three telco companies have also effectively increased the price of a range of pre-paid plans by reducing their expiry periods, forcing their customers to recharge more often.  

‘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.’  

Telstra has increased its post-paid mobile plan prices by between $5 and $15 per month in the past twelve months.  

The telco company has also reduced its recharge expiry on 35-and-42 day pre-paid plans to 28 days. This equates to a price increase of between 25 per cent and 50 per cent over a year.  

Meanwhile, Optus has raised the price of all of its post-paid plans by $6 per month since May while leaving its pre-paid plans as it is. The ACCC has reported that this caused a price increase of between 8 per cent and 15 per cent. 

Vodafone’s post-paid plans have also gone up by between $5 and $40 a month but the increases are reported to be accompanied by heavy discounting and temporary bonus inclusions. 

However, the company’s pre-paid plans were reduced to a 28-day expiry from a 35-day expiry. This reduction still keeps the same monthly cost, equating 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,’ ACCC Chair 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.’  

ACCC Chair Sims explained that competition will be muted and consumers will end up paying more when the markets have a small group of large look-alike players with stable positions.

The ACCC encourages the three telcos’ mobile customers to compare the prices and features offered by smaller providers as a cheaper alternative since their voice calls, SMS and data packages are similar to those offered by the three companies.  

Customers of the three telco giants could save between $5 and $25 per month by moving to a different provider with comparable data inclusions. The ACCC also encourages consumers to check how much data they use and choose a plan that covers only the data they need.  

‘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,’ ACCC Chair 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.’  

ACCC Chair Sims advises consumers to compare different providers’ geographic coverage and consider their individual needs since not all providers can offer the same coverage.

‘There are still ways to find a cheaper mobile plan but, ultimately, dynamic competitive markets deliver best for consumers,’ ACCC Chair Sims said. 

Telstra, Optus and Vodafone collectively hold 87 per cent of the total retail mobile phone market. The companies also have more than 95 per cent of the post-paid market. 

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