Consumers benefit from reduced prices in a year affected by COVID

11 December 2020

Mobile consumers received much better value over 2019-20, as reported in the ACCC’s just released annual Communications Market Report.

The report also shows that communications networks successfully met the significant challenges posed by COVID-19 in 2020 and details significant trends and market developments in fixed broadband and mobile markets.

Mobile prices fell by 17 per cent during 2019-20 entirely due to a reduction in the price of entry level plans and particularly significant growth in data allowances and other inclusions. NBN broadband prices fell overall by a more modest 2 percent over the same period, with an increase in the price of entry level plans moderating the positive effect of higher plan inclusions.

“The growth in data allowances for mobile services means consumers received better value from their mobile plans,” ACCC Chair Rod Sims said.

“Whether this trend continues into 2021 will depend on how strongly mobile operators compete for new customers.”

While the total volume of data carried over broadband networks continues to grow strongly, fixed broadband still accounts for around 90 per cent of total downloads.

“More competitive wholesale pricing on the NBN will give consumers a broader range of affordable retail offers and keep the price of higher speed plans at levels that represent fair value,” Mr Sims said.

“It is encouraging to see broadband services in regional areas improved as a result of additional network investment as NBN Co is reporting that less than one per cent of fixed wireless cells are now subject to congestion.”

Australians continue to favour their mobile phones for voice services, with fixed line call minutes down by 15 per cent from 2018-19. Since 2015-16 fixed line voice call minutes have decreased by 50 per cent, while mobile voice call minutes have risen by 18 per cent.

Although the 5G footprint is limited, mobile network operators continue to invest in 5G roll out plans to bring faster speeds, lower latency, and the prospect of greater competition with fixed line broadband services.

“The impact in the mobile market is likely to depend on the willingness of consumers and businesses to upgrade to more expensive devices,” Mr Sims said.

There is also heightened competition in enterprise and business markets as Telstra responds to new entrants in the wholesale market.

NBN Co’s September announcement that it had concluded its initial build underlined the importance of its commercial access arrangements for encouraging more competitive retail broadband markets that benefit broadband users.  

“There are promising signs of further consumer benefit as RSPs take up improved offers strengthened via commercial negotiation undertaken over the course of our public inquiries,” Mr Sims said.

“The importance of maximising use of the NBN through improved affordability and strong retail competition cannot be overstated if we are to realise the full economic and social benefits of this significant investment.”

“Greater certainty over NBN product and pricing offers and stronger rebate arrangements, and better operational support for consumers, are all likely to emerge,” Mr Sims said.

NBN Co’s temporary supply of 40 per cent more network capacity to RSPs at no additional charge was crucial during the pandemic, as were the increases to data allowances on Sky Muster plans.

“The initiatives that NBN Co took over COVID demonstrate the direct role that wholesale access arrangements play in maintaining service quality and supporting greater use of the NBN by business and residential customers,” Mr Sims said.

However, some consumers and small businesses were unable to have problems resolved, as a number of service providers were not contactable due to reductions in international call centre availability.

“Consumers must be able to contact their service provider when a problem arises. While customer service issues pre-date COVID-19, the pandemic has served to highlight these problems,” Mr Sims said.

The ACCC’s report is available at Communications Market Report 2019-20

Release number: 
265/20
ACCC Infocentre: 

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Media enquiries: 
Media Team - 1300 138 917, media@accc.gov.au

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