Customers pay a price for loyalty to their telco, but SIM evolution will make change easier

Consumers are sticking to the familiar, but could be losing out on savings.

Consumers are sticking to the familiar, but could be losing out on savings. Photo: TND/Getty

Loyalty to telcos is costing Australians extra money, with almost a third sticking by their provider even if their bill increased.

A survey by Finder showed 28 per cent of customers were willing to stick out price hikes of up to $10 a month ($120 a year) before switching, while 12 per cent would wait until their bill increased by $20 or more a month ($240 a year) before considering changing providers.

Finder utilities expert Mariam Gabaji said while it was easy to remain attached to the same telco, this might stop customers from getting the best bang for their buck.

“Not comparing your options and looking around for a better deal will end up costing you more in the long run,” she said.

Although the stagnant telco market might discourage consumers from exploring their options, incoming SIM evolutions could spark change.

Same, same

Younger generations and those with less cash are more willing to switch providers, but many Australians stick with what they know, independent telecommunications analyst Paul Budde said.

He said the lack of variety of plans and pricing, particularly among big-name telcos, discouraged consumers from making a change.

“Yes, you can change from Telstra to Optus. Is it going to change a lot? No,” he said.

Larger telcos have the advantage of more coverage, with Telstra’s 4G network covering 99.4 per cent of the population.

Many of the smaller mobile data providers in Australia are owned by, or affiliated with, Telstra, Vodafone, and Optus – providers that control more than 90 per cent of the pre-paid and post-paid mobile markets.

RMIT associate professor Mark Gregory said while the slow move of consumers from large to small telcos might one day significantly shift market share in favour of the smaller companies, the resistance to new technology by the big telcos was slowing progress.

eSIMs to shake up industry

Apple’s latest iPhone launch came with the surprise announcement that US customers would receive the new models without physical SIM card trays, with the tech giant pushing for the adoption of eSIMs.

Dr Gregory said there was “no need” for physical SIM cards any more, but some telcos were reluctant to introduce eSIMs so they kept their hold on customers.

“Operators are fully aware that SIM cards are a way to hold customers on their networks,” he said.

“With mobile phones, [when switching service providers], many of them require you to change the SIM card or to get a new SIM card. That means that you either get it in the mail, or you’d have to get it in store, which takes time and effort.”

Dr Gregory said future pushes from Apple and Samsung would likely mean eSIMs would be widely adopted in Australia.

Mr Budde said while this probably wouldn’t happen for at least another five years, it would usher in a new era of deals for consumers.

Retailers such as Woolworths (which already has its own mobile network in affiliation with Telstra) and Amazon would likely offer deals for customers using affiliated mobile service providers, he said.

“If you look at the whole digital environment over the last 10 years, with apps, with websites and internet, then you see an enormous amount of digital innovation. And the eSIM will add to it,” he said.

“You can absolutely bet on it, that all these digital companies out there are looking at opportunities on how they can use this new development.”

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