ACCC finalises report on communications market

5 April 2018

The ACCC has today published the final report of its communications sector market study, which includes 28 recommendations and actions on competition and consumer issues.

Much has changed since the ACCC published its draft report in October 2017. Since then, the ACCC has secured eight court-enforceable undertakings from various internet service providers on NBN speeds, and commenced an inquiry into NBN wholesale service standards. NBN Co launched promotional pricing for its 50Mbps speed product and CVC charges, responding to concerns by service providers.

Last week, the ACCC published the first Monitoring Broadband Australia report detailing broadband speed tests.

 

“The communications sector is undergoing a period of rapid change. Since the draft report, there has been encouraging progress on key issues identified in the report like NBN speeds, pricing and work towards improved service standards, at least in part because of the actions we have already taken,” ACCC Chairman Rod Sims said.

The report has found that the markets for broadband and voice services are operating competitively under the current regulatory arrangements, despite the levels of concentration.

“Despite market concentration, competition in the sector is leading to lower prices, greater choice in services and service providers, and bigger inclusions for voice and broadband services on fixed and mobile networks,” Mr Sims said.

“Competition will increase further as Vodafone expands its NBN footprint and TPG deploys its wireless network, bringing additional choice to consumers in terms of quality and pricing of telecommunications services.”

“It is important, however, that progress on NBN speeds, pricing, and service standards issues is sustained,” said Mr Sims.

In particular, and given the improvements to NBN consumer experience as a result of its recent promotional pricing, the ACCC looks forward to NBN Co putting in place longer term arrangements for its pricing directed at encouraging the efficient use of its network.

The market study examined likely competition and efficiency developments in the communications sector over the next five years during which 5G technology will be adopted, the NBN rollout completed and the Government’s plans announced.

The ACCC is currently consulting relevant stakeholders on licence allocation limits for the forthcoming auction of 3.6 Ghz spectrum by the ACMA. This is part of a broader spectrum band that has been identified internationally for early deployment of 5G services.

“While there is still some uncertainty about the nature and timing of 5G deployment, we are confident it will create great opportunities for both industry and consumers. 5G also has the potential to accelerate fixed to wireless substitution,” Mr Sims said.

“Importantly, the price and service performance of NBN services will influence the extent to which this substitution will occur.”

The final report and a fact sheet are available at: Communications sector market study.

About the market study

The ACCC announced the study in August 2016. The ACCC published an issues paper in September 2016 and subsequently considered 83 submissions and over 1000 responses to a consumer questionnaire. In July 2017 it held a two-day stakeholder forum before releasing a draft report in October 2017.

Background

The ACCC has taken a number of steps to improve the customer experience on the NBN since we published the draft report in October.

We have accepted court-enforceable undertakings from eight internet service providers to ensure that customers are not misled about the maximum speeds they can achieve on certain NBN FTTN/B plans. These include undertakings from Optus, Telstra, TPG, iiNet, Internode, Dodo, iPrimus and Commander.

Companies have started implementing our broadband speed claims guidance to ensure consumers have comparable information about typical busy period speeds. Since then, service providers have improved the speed information available to consumers.

Last week we published our first report on measuring broadband speeds which shows that, currently, NBN plan speeds in busy hours are typically not much below speeds outside of peak times.

We started an inquiry into NBN Co’s wholesale service standards examining whether the service levels currently in place are appropriate and effective.

In December 2017, the Government announced new protections to ensure customers get the level of service they expect from their retail service provider as they transition to the NBN.

Release number: 
61/18
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