Telstra, Optus and Vodafone prices soar after $15 billion mega merger: ACCC
ACCC chair Rod Sims is disappointed that the TPG-Vodafone merger has led to higher consumer prices. Photo: TND
Your monthly phone bill is probably soaring because Telstra, Optus and Vodafone have jacked up their prices by between $60 and $480 a year.
New Australian Competition and Consumer Commission (ACCC) data has tallied up the cost of easing competition in the mobile market after the controversial $15 billion TPG and Vodafone merger last June.
It finds consumers are now paying more for data they probably don’t use and many are being forced to recharge mobile credit much more often.
ACCC chair Rod Sims, who opposed the Vodafone tie-up, said the loss of a major competitor had left millions of Australians with higher bills.
Mr Sims said that because TPG had entered the market with lower prices, it had prevented Telstra and Optus from pushing through increases and had even forced them to lower prices on a few occasions.
But those days are now over.
“You have three lookalike players [that] don’t want to disrupt the market,” Mr Sims told The New Daily.
“Competition has lessened and the major players now feel able to increase their prices.”
Telstra, Optus and Vodafone price hikes
The ACCC has found millions of Australians are now paying the price for a highly concentrated marketplace.
Telstra, Optus and Vodafone collectively control 87 per cent of the mobile retail market, and all three have increased prices on pre-paid and post-paid plans.
The consumer watchdog said they have either directly increased sticker prices or slashed expiry periods tied to their pre-paid mobile offers.
Smaller expiry windows mean higher effective prices over time because they force customers to top up their credit more often.
“These are significant price increases, often for people who take out a pre-paid plan because they don’t have a lot of money and can’t afford to run the risk of going over,” Mr Sims said.
“They’re now going to pay a hell of a lot more.”
In Vodafone’s case, the smaller expiry windows mean customers will be recharging their credit 13 times a year instead of 10 times, increasing the annual spend for customers recharging more than $30 by 25 per cent.
Telstra’s post-paid price rise was done through a “forced migration” last year that moved customers to more expensive plans with extra data.
It offered some people a 12-month credit to temporarily offset the hike.
Small players offer better deals
Mr Sims believes Australia’s merger laws failed consumers in allowing the TPG-Vodafone merger to go through and will recommend changes to the government later this year.
In the meantime, he’s urging customers to consider switching providers.
“You can go to Aldi, Belong or Amaysim,” Mr Sims said.
“They’ve all got $25-a-month plans and they give you over 15GB of data, which is more than average usage.”
Canstar Blue telco expert Tara Donnelly backed that advice, saying small competitors are offering the best deals in the market right now and have comparable network coverage.
“This is a really good time to assess what you’re paying and look around at smaller providers who use the same networks,” Ms Donnelly told TND.
“Generally you’ll find you can get the same data for less than half the price.”
Consumer comparison site Finder said Circles.Life’s 100GB monthly plan is currently the best on the market at $28 a month – far cheaper than those offered by the big three.
It’s also much less expensive than the average mobile phone bill, which according to Finder is $55 a month.
“The big three telcos still have bricks-and-mortar stores where you can easily try out phones and sign up to a contract,” Finder telco expert Angus Kidman said in a statement on Monday.
“That seems easy, but the running expenses … factor into what you pay.
“Not comparing your options and asking for a better deal will cost you.”
No use, no pay
Mr Sims also warned customers to be wary of paying for mobile phone data they don’t use.
He said the large telco companies are selling plans offering more than 150GB in monthly data, despite ACCC research indicating the average customer only uses about 15GB per month.
“Often you get price increases from one of the majors that offer things that superficially sound good,” Mr Sims said.
“But if customers really knew what they were getting, they wouldn’t want to pay for it.”