ACCC reveals increase in mobile data fees
Australians are paying more for their broadband and mobile phone services than they were a year ago, but are receiving faster nbn speeds and more data allowances in their mobile plans in return, according to the ACCC’s 2020–21 Communications Market Report.
The report details the trends and developments in the markets for fixed broadband and mobile phone services, and outlines the state of competition in the telecommunications sector. The report revealed that generally, telecommunications networks met the demands of Australian households and businesses that relied on their broadband services for work, education and entertainment during the second year of the COVID-19 pandemic. However, consumers are now on average paying more for home broadband and mobile phones in exchange for higher-speed services and additional data.
For people who had an existing plan that already met their needs, it is unclear if the higher speed or extra data is sufficient trade-off for the higher price. In 2020–21, an average mobile customer on a postpaid contract used only 11.8 GB of data per month, compared to a median data allowance of 35 GB per month. Mobile network operators Telstra, Optus and TPG increased prices across a range of their flagship products this year, with the price of entry-level prepaid mobile services rising by 16.2% on average in 2020–21, as a result of increases to the cost of basic plans and reductions in the expiry periods.
ACCC Commissioner Anna Brakey noted that reducing the expiry periods on prepaid plans from 35 and 42 days to 28 days is “a price increase by stealth”, adding that over a year, this means consumers are recharging more often and therefore paying up to 25% more for their mobile phone service. While average mobile prices rose, Telstra, Optus and Vodafone moved towards a ‘more for more’ model in which they offer 50–100% more data across their plans at a higher cost. “While consumers are getting more data allowance than before, it is unclear if they want or need it, as an average person isn’t currently going anywhere near using the average mobile data allowance,” said Brakey.
The ACCC has also expressed concerns that consumers are paying more for mobile phone plans, following the merger of TPG and Vodafone in 2020. With the market now heavily concentrated with three players, prices on many popular items have risen as price competition is muted. Telstra, Optus and Vodafone now account for over 91% of the total retail mobile phone market, and almost 95% of the postpaid market.
The report also revealed an increase in the price of broadband services in 2020–21. While many households trialled higher-speed nbn plans at no extra cost through promotional offers, those who agreed to move their service onto a higher-speed plan paid between 6 and 11% more, compared to 2019–20. However, consumers did not pay more for entry-level, lower-speed nbn plans than they did in 2019–20. Brakey revealed that higher-speed nbn plans cost consumers about $5–10 more per month than the most popular speed plans, but it is still unclear how many consumers will consider this as good value as their promotional offers end. Brakey encouraged consumers to weigh up their internet needs and choose their broadband plan based on what they think represents better value, given the higher prices being charged for some plans. “Retail service providers are required to have fact sheets available to assist consumers identify the broadband plans that are relevant to them,” said Brakey.
The total volume of data downloaded over broadband networks increased by nearly 20% in 2020–21 and fixed broadband accounted for almost 90% of total downloads. An increasing number of Australians continued to opt for ‘mobile only’ for phone calls, or use over-the-top voice applications such as Skype and WhatsApp. The volume of calls made from traditional phone lines decreased a further 13% in 2020–21.
The report also looked at the work of the ACCC, NBN Co and the telecommunications industry in developing a revised long-term regulatory framework for the NBN, to ensure the economic benefits of this public investment are realised. “We are particularly interested in providing a stable, long-term regulatory framework that promotes a sustainable and competitive nbn market. This is essential as the nbn infrastructure will underlie much of the economic and social activities of Australians in the decades to come. Strong regulatory settings will provide greater certainty for industry, enhanced choice for consumers and more opportunities for businesses,” said Brakey.
The report highlighted the ACCC’s enforcement activities in the telecommunications sector to help protect the interests of consumers. In 2021, a $50 million penalty, reportedly the second highest under Australian Consumer Law, was imposed against Telstra for engaging in unconscionable behaviour. Brakey stated that Australian businesses have a responsibility to comply with Australian Consumer Law and not mislead or deceive consumers, adding that there are significant penalties for those that do.
The ACCC was required to provide this report annually for tabling in parliament. However, following legislative changes in December 2019, the ACCC is required to publish the report on its website by 31 December of the relevant financial year.
Gidarjil Development Corporation is using Cradlepoint 5G technology to deliver cultural,...
Samsung has been ordered to pay $14 million in penalties after admitting to have misled consumers...
Ericsson has released the 22nd edition of its Mobility Report, which projects 4.4 billion 5G...